Kerry touches the third rail
David Wessel, in today's Capital Journal [subscription required] suggests that Kerry may actually have real ideas and a plan for Social Security, as opposed to Bush's romance novel masquerading as a fiscal plan.
President Bush describes personal accounts as if they're a painless way to fix Social Security. Despite their appeal, personal accounts alone won't cure Social Security's ills. Don't take my word for it. In a presentation drafted for President Bush in October 2001, his economic advisers said: "Even with the higher [investment] returns from personal accounts, there are only two ways to make the program fiscally sustainable: (1) Increase revenues. ... (2) Decrease expenditures."
...
Mr. Kerry is emphatic about what he won't do. He won't "privatize" Social Security. (Someone must have focus-grouped that verb.) He won't put Social Security funds into stocks. Taking safe positions that campaign managers love, he vows to name a commission to study Social Security and "to do more to help workers save for retirement outside of Social Security."
But Mr. Kerry has thought, or been briefed, about the tough stuff. In Brooklyn over the weekend, he seemed to make the case for a higher retirement age. When Social Security began, he said, 13 workers were paying into the system for every retiree. "Your life expectancy was 62," he said, in the staccato of the campaign trail. "Sixty-five retire. Life expectancy 62. Thirteen people paying in. It works." My colleague Jacob Schlesinger reports that after the laughs subsided, Mr. Kerry said, "Today, you've got about three people paying in, and soon it may go down to two, and your life expectancy is well into the 80s."
He didn't pursue this to its logical conclusion, the logic that leads nearly all experts to predict an increase in the age at which full benefits are available. That's now 67 for those born after 1959. Workers can retire at 62, but get smaller monthly checks.
On this, Mr. Kerry does the tiptoeing of a candidate who wants to avoid endorsing or ruling out an unpopular change that he knows is inevitable. On NBC's "Meet the Press," he said flatly, "I'm not going to lift the retirement age or make it harder for hard-working Americans to retire." But to the AFL-CIO, he has said, "Even though life expectancy has increased, it doesn't mean that all workers -- particularly those who work on their feet -- can work until 70 or beyond." Ask his campaign policy adviser, Sarah Bianchi, to clarify and she says: "He is pretty much against raising the retirement age. He is worried about those folks who do work on their feet in manufacturing or waitressing."
Over the weekend, Mr. Kerry tried out a new pitch, musing about "ways in which you can begin to think about making Social Security fair."
"If you live well into your 80s, those people who are multimillionaires in America are collecting checks from people earning 25, 30, 40, 50 thousand dollars a year. Now tell me how that makes sense?" he said in Brooklyn. Or, as he put it on "Meet the Press," "I don't understand why John Kerry ... ought to be getting [Social Security benefits] from someone earning $22,000, if I were lucky enough to live into the 80s."
When candidates talk like that, there's often an idea lurking. Ms. Bianchi says Mr. Kerry has in mind changing the formula used to compute retiree benefits to make them less generous to higher-wage workers. He isn't specific. One plan circulating outside the campaign would fix about one-quarter of Social Security's money woes by shaving benefits for workers who earn $87,000 a year by about 11% while boosting benefits for lower-wage workers. This approach, some Republicans would surely note, would make private accounts look all the better to higher-wage workers.
Perhaps this year's Social Security debate won't be devoid of substance after all.
Bush's fiscal plan is so obviously over the top that if Kerry can put together a real spending plan that takes into account the massive debt we're now faced with, even, gasp, admitting that sacrifice will be required, it may actually be an advantage with moderate swing voters this year.
And Kerry is going to have to fashion a message that makes his nuanced (yes, senatorial) thinking on difficult subjects an advantage, not "whobbling." Are voters ready for someone who thinks? We'll see. It certainly differentiates the candidates.
President Bush describes personal accounts as if they're a painless way to fix Social Security. Despite their appeal, personal accounts alone won't cure Social Security's ills. Don't take my word for it. In a presentation drafted for President Bush in October 2001, his economic advisers said: "Even with the higher [investment] returns from personal accounts, there are only two ways to make the program fiscally sustainable: (1) Increase revenues. ... (2) Decrease expenditures."
...
Mr. Kerry is emphatic about what he won't do. He won't "privatize" Social Security. (Someone must have focus-grouped that verb.) He won't put Social Security funds into stocks. Taking safe positions that campaign managers love, he vows to name a commission to study Social Security and "to do more to help workers save for retirement outside of Social Security."
But Mr. Kerry has thought, or been briefed, about the tough stuff. In Brooklyn over the weekend, he seemed to make the case for a higher retirement age. When Social Security began, he said, 13 workers were paying into the system for every retiree. "Your life expectancy was 62," he said, in the staccato of the campaign trail. "Sixty-five retire. Life expectancy 62. Thirteen people paying in. It works." My colleague Jacob Schlesinger reports that after the laughs subsided, Mr. Kerry said, "Today, you've got about three people paying in, and soon it may go down to two, and your life expectancy is well into the 80s."
He didn't pursue this to its logical conclusion, the logic that leads nearly all experts to predict an increase in the age at which full benefits are available. That's now 67 for those born after 1959. Workers can retire at 62, but get smaller monthly checks.
On this, Mr. Kerry does the tiptoeing of a candidate who wants to avoid endorsing or ruling out an unpopular change that he knows is inevitable. On NBC's "Meet the Press," he said flatly, "I'm not going to lift the retirement age or make it harder for hard-working Americans to retire." But to the AFL-CIO, he has said, "Even though life expectancy has increased, it doesn't mean that all workers -- particularly those who work on their feet -- can work until 70 or beyond." Ask his campaign policy adviser, Sarah Bianchi, to clarify and she says: "He is pretty much against raising the retirement age. He is worried about those folks who do work on their feet in manufacturing or waitressing."
Over the weekend, Mr. Kerry tried out a new pitch, musing about "ways in which you can begin to think about making Social Security fair."
"If you live well into your 80s, those people who are multimillionaires in America are collecting checks from people earning 25, 30, 40, 50 thousand dollars a year. Now tell me how that makes sense?" he said in Brooklyn. Or, as he put it on "Meet the Press," "I don't understand why John Kerry ... ought to be getting [Social Security benefits] from someone earning $22,000, if I were lucky enough to live into the 80s."
When candidates talk like that, there's often an idea lurking. Ms. Bianchi says Mr. Kerry has in mind changing the formula used to compute retiree benefits to make them less generous to higher-wage workers. He isn't specific. One plan circulating outside the campaign would fix about one-quarter of Social Security's money woes by shaving benefits for workers who earn $87,000 a year by about 11% while boosting benefits for lower-wage workers. This approach, some Republicans would surely note, would make private accounts look all the better to higher-wage workers.
Perhaps this year's Social Security debate won't be devoid of substance after all.
Bush's fiscal plan is so obviously over the top that if Kerry can put together a real spending plan that takes into account the massive debt we're now faced with, even, gasp, admitting that sacrifice will be required, it may actually be an advantage with moderate swing voters this year.
And Kerry is going to have to fashion a message that makes his nuanced (yes, senatorial) thinking on difficult subjects an advantage, not "whobbling." Are voters ready for someone who thinks? We'll see. It certainly differentiates the candidates.
posted by John at 7:20 PM
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