Saturday, April 19, 2008

McCain has nothing to say about Social Security. But he's already said enough.

In 2005, President Bush introduced a plan to borrow $2 trillion to begin privatizing Social Security. He told us that if Social Security was left as it is now then it would begin running a deficit in 2014 and become insolvent by 2042.

Well, that failed. The President was actually completely correct about the crisis that Social Security is facing, but his solution to privatize the system would have done little to prevent its impending collapse while putting at risk the retirement income of millions of people.

So how does the man who wants to succeed him as Republican nominee and President feel about the issue?

Well, I went to John McCain's website and in his 'search this site' button I typed in, "social security" and well,

what I get is:

"No documents were found."

Frankly it is frightening that a man who wants to be President of the United States has so little to say about Social Security that the two words don't appear together even one time on his website.

Luckily though there is a record of what he thinks.

On April 1, 1998 he voted, "Yes" to Senate concurrent resolution 86 which would have set up private accounts using the then-surplus.

And in the New York Times on January 11, 2000, an article about McCain's plans for Social Security said:

McCain will present today his first comprehensive plan for apportioning the spoils of the nation’s current prosperity, calling for. a program to shore up Social Security through the establishment of individual retirement accounts. McCain also specifically allocates money to help Medicare, which like Social Security faces a financial shortfall as the population ages. He calls for workers to have the option of investing at least 20% of their Social Security payroll taxes in private accounts.

In a 1999 Fox News interview McCain was quoted as saying,

Allow people to invest part of their taxes earmarked for Social Security to investment, in investments of their choice. I am convinced that that will make the Social Security system solvent.

In 2005, McCain supported the Bush initiative.

In a GOP debate in Orlando, Florida on October 21, 2007, he was quoted as saying

It's got to be bipartisan. And you have to go to the American people and say we won't raise your taxes. We need personal savings accounts, but we got to fix this system.

He wants it to be bipartisan, and his language is a bit more nuanced, but it's clear that he still hasn't given up on privatization.

Now I know why he hasn't said anything at all this year about Social Security. If he hadn't thought about such a major issue, I'd question his qualifications to be President. But he's thought plenty about it, and he appears to agree with President Bush on it. So I'm not questioning whether he's qualified, but rather I'm questioning whether his failure to put in on his website is because he knows darn good and well that many people would view his plans as extreme, as well they should.


shrimplate said...

Since Social Security is the most successful program in history, naturally the Republican plan is to let it rot on the vine and then blame Bill Cliton for ruining it.

Anonymous said...

If it's a real crisis, like Bush said, then what is the solution to fix it? I guess I don't understand why privatization would be so terrible, and I can't think of any other proposal to fix it. We could always raise the retirement age, cut down on benefits, or increase payroll taxes, but that would upset a lot of people and I don't know if those proposals are politically feasible.

Eli Blake said...


The problem with privatization is that privatization (as proposed by Bush two years ago would not have fixed it.)

At the outset, the Bush administration proposed borrowing $2 trillion just to cover the cost of conversion. One could argue that sooner or later we will have to figure out how to come up with that kind of money anyway, but the casual way they just tossed that in there was one of the first red flags that went up. Then it turned out that 1) benefits would have in fact been cut for people who opted to stay in the system; and 2) those who chose private accounts and invested poorly (and say what you will about individual responsibility, but from a numerical standpoint there will always be some people who invest well and some who don't) would not then have had even enough when they reached retirement to pay for any kind of housing. Of course the whole premise of Social Security has been that when people are too old to work they should be guaranteed at a minimum of being able to afford a roof and food (spartan though they may be.) If you can't guarantee that then you might as well eliminate the system entirely.

As far as the solution, precisely because of a political backbone, Glenn Beck has astutely observed that we have passed the point where we could solve the problem by increasing retirement age, raising taxes or cutting benefits (or even two out of three) but will instead likely have to increase retirement age, raise taxes and cut benefits.

The issue here is that we've never had a real discussion about it. Past attempts to reform Social Security included Bill Clinton's, who raised the retirement age (I was born in 1962, the first year when the retirement age is 67) but he absolutely refused to consider cutting benefits, and Bush's, which included a benefit cut but he ruled out raising taxes from day one. What these have in common is that they were plans developed and put forward in near-complete form by Presidents who never invited a national discussion on it.

Given the pain that reforming the system will certainly involve, I'd propose the following: A panel to write the reform law, similar to Hillary's health care task force and Cheney's energy task force. Only two huge differences-- instead of doing it in secret and behind closed doors, let every moment of the discussion be televised live. Some might argue that only C-SPAN would do that (and if only C-SPAN does, then so be it) but in fact given the compelling nature of the problem I suspect that an awful lot of people would tune into it (if there is one thing I will credit the Bush administration for, it is that far, far more people are interested in what goes on politically than there ever were during the preceding two or three decades-- you can see it just in the spike in voter registration and turnout this decade.) I also would propose that instead of the hand-picked nature of Hillary's health care task force, Cheney's energy task force (as far as we know-- we still don't know everyone who was involved) or for that matter Bush's social security team (which included five members of the Cato Institute, a Washington think tank with about 250 members total) we should let the administration pick no more than 40% of the membership of the task force, with the remainder selected by ex-Presidents in roughly equal proportion (to ensure ideological balance.) It's just too important an issue to let it become a political football again.

It also has to be said that our failure on immigration reform also plays into the Social Security situation. Our 'age pyramid' is already becoming topheavy, and sooner or later we are going to have to have more young people or it will collapse under its own weight (not just in terms of Social Security, but in terms of strains on the health care system and services.) It's a fact that the vast majority of immigrants (especially illegal ones) come here as young people, and further that Hispanic women in the United States (immigrant or otherwise) have a fertility rate of 3.1 while non-Hispanic women have a fertility rate of about 1.8 (meaning that without Hispanic women our population would be declining, much as we see in Europe today.) All of which exemplifies that our failure to address issues often ripples into other issues, and they don't occur in a vacuum.

Anonymous said...


Thanks for your detailed response. That helps a lot. I've watched Glenn Beck a few times on CNN and so I guess I have heard some of those things before, but never thought it through.

So it sounds like the solution is ... we don't know the solution. But certainly there is still a need for Social Security. We need to fix the system and quick, so hopefully the next president will do the right thing like you suggested.

I wish that while the Democrats were so interested in nationalized health care that they would also take charge of the discussion on Social Security reform. The Republicans thus far have framed the debate in a way that to me (and I think a lot of people) makes privatization seem like the only workable solution, despite the flaws in that approach.

I don't really mind paying Social Security taxes, because I think it's a good system in principle. But I also resent it because I feel like there won't be anything left when I'm old, that I'll have to rely on my own private investments to get by. So why not let me divert some of those funds into my own retirement account?