Tuesday, March 01, 2005

Brad DeLong States the Democrat's Social Security Plan

Brad DeLong disagrees with the Bull Moose that the Democrats need to come up with an alternative plan for Social Security even as they oppose the phase-out plan of the Republicans. DeLong argues that Democrats already have a clear plan:
But there is an alternative plan on Social Security that is a near-consensus position for Democrats. It has three parts:
  1. Social Security should be preserved--not phased out, as the Bush plan's "price indexation" formula does.
  2. Social Security's long-run funding hole should not be closed by benefit cuts alone, but by a mixture of steps that reduce costs and increase revenues.
  3. Private accounts to make it easier for America's non-rich to build their retirement savings are a wonderful idea if properly implemented and if proposed as an add-on to rather than a carve-out from Social Security.

And there are also two observations on the Bush administration:

  1. You can't negotiate with the Bush administration: its word is not good.
  2. You can't rely on the Bush administration: its track record tells us that even good ideas will be implemented very badly if they are left in its hands.
These last observations signal a cautionary note to all Democratic Senators (that's you, Mr. Lieberman) who may be tempted to cut a deal with Sen. Lindsey Graham (R-South Carolina) because any negotiations will be either (1) completely overridden during conference committee, or (2) so utterly undermined by other subsequent provisions as to render them unrecognizable. The best strategy is to stick with the three-part plan and to keep in mind that these observations vitiate any real possibility of achieving #3 viz. the "properly implemented" part.


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