Texas Governor George W. Bush has yet to formally announced his
plan to reform the Social Security system, but journalists are
already adopting some of Vice President Al Gore’s "risky business"
rhetoric as they cast doubt on the notion of "privatizing" any
portion of the retirement fund.
says let Americans bet their future Social Security income on Wall
Street; Gore says bad idea," teased Dan Rather at the top of
Monday’s CBS Evening News.
"Would you bet your Social Security on the stock market? Governor
Bush says why not?" echoed NBC’s Tom Brokaw on the Nightly News
that same evening.
Journalists’ argument that Bush plans to recklessly gamble with
citizens’ retirement money was, perhaps coincidentally, also the
theme of Gore’s attacks on the not-yet-released plan. "Risky ideas
that look good in good times don’t look so good when times change,"
Gore told NBC’s Claire Shipman on May 1.
Yet for years, reporters have warned that the Social Security
system is moving inexorably toward insolvency. "Here’s the basic
problem," reported NBC’s Lisa Myers last June. "In 1950, there were
16 workers paying into Social Security for every senior receiving
benefits. Now there are only three workers for each retiree. And in
2010, when 79 million baby boomers start to retire, there will be
only two workers per retiree. That means in 35 years, by the year
2034, the system would be broke, able to pay only 71 cents of every
dollar promised in benefits."
There aren’t many remedies available to stave off bankruptcy,
either. To maintain the current system, taxes could be raised even
higher or benefits could be cut — either directly by slashing
pension checks, or indirectly by raising the retirement age. The
only other option would be to try to restructure the program to
increase the rate of return on Social Security’s nest egg (which has
averaged less than one percent per year since 1970, according to
Peter Ferrara, chief economist of Americans for Tax Reform), and one
way to do that is to invest the money in the stock market, as most
private pensions systems do.
Writing in the New York Times last year, economist Milton
Friedman explained "Social Security has become less and less
attractive as the number of current recipients has grown relative to
the number of workers paying taxes, an imbalance that will only get
bigger. That explains the widespread support for individual
investment accounts. Younger workers, in particular, are skeptical
that they will get anything like their money’s worth for the Social
Security taxes that they and their employers pay. They believe they
would do much better if they could invest the money in their own
401(k) or equivalent."
If journalists are right in arguing that the present Social
Security system is in need of radical reform before the baby boomers
retire, then one could easily argue that obstructing such reforms is
what’s truly "risky."