Put Social Security Reform in the President's Budget

Tomorrow at 11am (Nov 18) Senator Lindsey Graham of South Carolina will introduce a new Social Security reform bill.

However, that bill or any other major Social Security proposal is going nowhere unless President Bush and Congress start allocating a budget for the considerable transition costs of reform.

Social Security reform generally implies pre-funding the program's future costs by contributing funds to workers' personal retirement accounts. As those accounts grow, they could be used to offset the benefit cuts that will become almost inevitable (or at least highly likely) as the huge baby boom generation retires and joins the entitlement rolls over the next 30 years.

The transition costs of personal accounts are not free. But they have not yet appeared in the President's Budget or the Congressional Budget Resolution.

Until we start allocating money for transition costs in the budget, we can be sure the Social Security reform debate won't be taken seriously. Republicans will tout personal accounts and Democrats will denounce privatization, but there will be no hope for a more rational debate, because everybody knows nobody is serious.

Now, two prominent reform advocates, Rep. Jim DeMint of South Carolina and Rep. Charlie Stenholm of Texas have sent a letter, signed by more than a dozen of their colleagues in the House, urging President Bush to take the first step: reserving a fund for the transition costs of Social Security reform in next year's budget.

Putting Social Security reform in the budget would signal that it's time to get serious, and to launch a substantive public discussion of the pros and cons of reform.

Links:
DeMint-Stenholm Letter to President Bush (November 10, 2003)
Centrists.Org Raising the Cap on Payroll Taxes Doesn't Solve the Social Security Problem (November 17, 2003)

Posted by Jeff Lemieux at November 17, 2003 05:00 PM