Critics misrepresent Bush plan

The gross national whine has grown louder in recent months as liberal talking heads have crisscrossed the country misrepresenting President George W. Bush’s proposed Social Security reform.

Since its introduction, Democrats have attacked President Bush’s plan for partially privatizing Social Security by allowing younger wage earners the option of investing a small portion of their taxes into personal retirement accounts. Participation would be voluntary.

The primary criticism made by Democrats is that this type of plan is too risky to implement. Liberals would have Americans believe that these retirement funds would be invested in lottery tickets, off-track betting, dog fights and Lucent Technologies (in the interest of disclosure, I happen to own Lucent stock and although it’s down, I like the company long term).

Too risky, they argue. Nothing could be further from the truth. President Bush’s plan contemplates guidelines that would set standards for investments, much like those used by the Thrift Savings Plan. The Thrift is the retirement plan for federal employees and is responsible for the billions of dollars these future retirees contribute over their lifetime.

No one is out there accusing the Thrift of mismanagement or investment ineptness, and personal retirement accounts would be managed in a strikingly similar manner. I bet that Senator Hillary Rodman Clinton loves her returns from the Thrift, although it is nothing compared to her returns on cattle futures.

Some liberals argue that retirement funds should not be invested in equities because the rate of return cannot be guaranteed. Social Security currently provides a 2% rate of return for all investors; the S&P 500 averages 10%. Which one do you want your money in? Sure there are short term peaks and valleys in stock growth, but over time, equities have consistently returned more than Treasury Bills.

Still other critics take the Politburo approach and claim that nothing is wrong with social security. This reckless, irresponsible argument is dead wrong. By 2018, the amount of benefits Social Security pays out will be less than the amount of money it brings in through payroll taxes. One cannot avoid the realities of demographics, and the Baby Boomer generation is going to be relentlessly demanding.

Sucked dry by beneficiaries, the Social Security trust fund will be bankrupt by 2042 with projected shortfalls estimated to be in the trillions of dollars.

Those are the facts. The Social Security system needs help now, and personal retirement accounts are part of the solution. President Bush’s plan would allow those who want to benefit from investments the freedom to participate in economic expansion.

It is not like payroll taxes are optional and individuals can chose to participate in Social Security or take that money and invest it in their IRA. If you do not pay your taxes, you go to jail. It just makes sense that the Social Security trustees be allowed to maximize future benefits – within well-established guidelines – on monies taken from working Americans.

What concerns me most is that many of the arguments against Social Security reform are founded in class warfare. The undertone of the left is that these types of reforms will only benefit the rich who already do not pay their fair share of taxes. Class envy is a slippery slope that quickly leads to us vs. them groupthink and has no place in the current debate.

This is not about rich versus poor. The issue here is that Social Security is in trouble. If the left does not like retirement accounts, then I suggest that they propose their own plan. But of course that would require the left to have vision, something Democrats lack as evidenced by recent national elections.

Jeff Qureshi is a VCU alumnus and former member of the Commonwealth Times editorial board.