May 24, 2007
Thursday

The Democratic Congress has launched some 36 investigations, has reaped six administration resignations -- and you know what else it has done? Nothing.

All this probing has its political advantages, of course, and some slight sliver of it might even be in the national interest. Meanwhile, however, the months are passing and Congress hasn't given final passage to a single major law the Democrats promised, much less acted on one very important challenge they have been dodging.

This important matter -- far more important than the promises -- is to fix Social Security. Here's a program absolutely vital in the lives of tens of millions, a program that is explicitly the responsibility of these congressional malingerers and a program that is in such a bad way financially that there won't be enough revenues to finance all the benefits just a decade out.

Do nothing about it, and along with Medicare it will eventually swallow the budget whole. Wait to act until the crisis is at hand, and the options will all be ghastly tricks on a trusting public.

Suppose, though, that the Democrats sit down with a president who has given them an invitation to come to the table with any ideas they like, and that they negotiate in good faith and with an eye on reality. Lo and behold, they may start discovering solutions that will be consistent with the political values they constantly express.

No, they won't make up the shortfall simply by eradicating the rule that says zero amount of a person's income above the first $90,000 can be taxed to pay Social Security recipients. This tactic might forestall the date at which Social Security suffers from a deficit by six years or so, but when they glanced up from doing this deed they would note most of the problem still sitting there, fat and sassy.

And the Democrats won't shrink the dangers to Social Security by a favorite demand they make of rescinding President Bush's tax cuts for the so-called rich. Eugene Steuerle, a senior fellow at the Urban Institute, has done the math and can show that repealing the reductions for those making more than $200,000 a year and applying the extra revenue to Social Security would reduce the future annual shortfall by no more than 20 percent, even if every cent went to that cause.

But there is a way you can begin to do significant repair work on Social Security so that the best off among us are the ones giving up something and the least well off are the ones profiting the most. The really good news is that even the best off won't be losing anything they would not be getting if they retired today.

. Isn't this what Democrats want, and if it is, why don't they then agree with a Bush proposal to alter a formula establishing the benefits recipients start out receiving, but only for the most fortunate? In the years ahead, these recipients wouldn't get as much as if the formula stayed unchanged, but neither would they be worse off than current recipients.

As a member of the Council of Economic Advisers once explained it, the average person retiring today gets about $14,000 a year, but in constant dollars would get as much as $20,000 by 2050 if the formula of the moment stays intact. Reduce the growth and you have taken a crucial step toward salvaging the system, even if more steps will be needed, and you will have begun to address another issue Democrats worry about.

Repeatedly, they announce how upset they are at the growing wealth gap between rich and poor. What they may not know is what USA Today recently reported: "Nearly all the additional wealth created in the USA since 1989 has gone to people 55 and older" while households "headed by people in their 20s, 30s and 40s have barely kept up with inflation ..." Social Security, a transfer system dependent on the payroll tax, takes from the poor (relatively speaking) to give to the rich (relatively speaking), and threatens especially to keep the less wealthy in need when the baby boomers start retiring.

Provide the richest recipients with less than currently planned, and you will do a favor to young people, who happen to be on the suffering end of a wealth gap that USA Today tells us is essentially a generation gap.

Now there's something truly worth investigating.

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