Tags: Al's | Most | Vicious | Lie

Al's Most Vicious Lie

Sunday, 05 November 2000 12:00 AM

Gore charges that "Bush has promised a trillion dollars out of the Social Security trust fund for young, working adults to invest and save on their own. But he's promised seniors that their Social Security benefits will not be cut, and he's promised the same trillion dollars to them. ... The trillion dollars that has been promised to the young people has also been promised to older people. And you cannot keep both promises."

Totally false.

First, the Bush plan would not give young people a trillion dollars, or even one dollar. It would merely give them a choice to invest part of their own Social Security taxes in an IRA, or to just leave it all wasting away in Social Security.

Those who elected to pay 15 percent less into Social Security would end up collecting about 15 percent less in benefits from Social Security. That reduction of benefits is largely automatic, since benefits are based on taxes paid over 35 years.

This reduced reliance on tax-financed benefits would take a big load off of Social Security 35-40 years from now, when a huge number of retired Baby Boomers will otherwise become an impossible burden on a relatively small number of younger taxpayers.

That is, partial privatization could reduce Social Security's huge $2.4 trillion surplus over the next 10 years – but it will certainly shrink Social Security's expenses by several trillions over the long run. And it is in the long run that the system's financial problems are expected to occur.

Listen carefully, and you'll hear Gore qualify his claim, as in the third debate: "If you're in your mid-40s, under the governor's plan, Social Security will be bankrupt by the time you retire."

In fact, Social Security will have far more income than is needed to pay benefits for at least 25 to 35 years, and the Bush option barely dents those near-term surpluses in exchange for tremendous long-term savings.

Gore's hysterical claim that Social Security will be bankrupt in 20 years (when those who are now 45 turn 65) inadvertently revealed that the Bush plan poses no risk at all to anyone older than 45.

But the program still faces that crisis in a few decades, when its accumulated surpluses run out. Rather than cut other government spending to keep up payments to seniors, will Washington choose to cut benefits or raise Social Security taxes? (This might be done surreptitiously – as when Clinton and Gore hiked the tax on Social Security benefits in 1993.)

That's the real risk faced by those under 45. Such reductions in after-tax benefits could easily wipe out the meager 1.9 percent return that younger workers are theoretically supposed to receive on their payroll taxes.

Workers under 45 are understandably skeptical about their odds of even getting back as much in benefits as they pay in taxes. Younger workers tend to be appropriately enthusiastic about the opportunity of selecting from a bigger retirement menu under the Bush plan.

Gore pretends unspent Social Security taxes can somehow be squirreled away in a "lockbox," but that, too, is a hoax. Surpluses can only be used to buy back Treasury bonds.

Gore tries to make a big deal out of the interest expense saved by allegedly redeeming privately held bonds at an earlier date than Bush, but Gore's own rosy estimates show an interest saving of only $6 billion a year. That is chump change compared with Social Security's promised benefits that are expected to exceed revenues by nearly $20 trillion over the long haul, in the absence of something like the Bush reform.

Gore's infamous penchant for class warfare and anti-business rhetoric has been a minor annoyance compared with his new passion for pitting young against old. Either he is inexcusably misinformed about Social Security, or he hopes to misinform enough voters for enough time to squeak past the election before being unmasked.

"You can fool some of the people some of the time" has become the fundamental theme of a shameless campaign. Gore propaganda about Social Security insults older voters by assuming they are easy to fool.

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Gore charges that Bush has promised a trillion dollars out of the Social Security trust fund for young, working adults to invest and save on their own. But he's promised seniors that their Social Security benefits will not be cut, and he's promised the same trillion...
Sunday, 05 November 2000 12:00 AM
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