Other editors say
Social Security alarms aren't new; neither are the candidates' responses
The Washington Post
For all the front-page headlines, there wasn't anything particularly surprising in Federal Reserve Chairman Alan Greenspan's warning Wednesday that the government can't afford the Social Security benefits it has promised and that benefits will need to be curtailed. He's sounded this alarm before, correctly so. Sadly, there also wasn't anything surprising in the reaction of the presidential candidates, both President Bush and his Democratic rivals, to Greenspan's statements: All of them scurried as far as possible from any hint of endorsing a change in benefits, however reasonable. It's a measure of the irresponsibility of both political parties regarding the entitlements debate that a proposal for rather minor adjustments in Social Security would be treated like such a ' well, like such a dangerous third rail.
Greenspan noted that the leading edge of the baby-boom generation will begin to be eligible for Social Security benefits in 2008 and that the demands on both Social Security and Medicare will grow inexorably in the following years, so we will eventually have no choice but to make significant structural adjustments in the major retirement programs. He suggested two modest changes that would ease, but not solve, the problem without unfairly punishing those on the brink of retirement. The first is changing the way Social Security benefits are adjusted to keep pace with inflation, replacing the existing consumer price index, which overstates increases in the cost of living, with a new, more accurate measure. The second is increasing the retirement age to reflect longer life expectancy; Greenspan suggested a form of indexing that would keep steady the ratio of years worked to years in retirement. Both suggestions are sensible, and both are rather standard fare in discussions of how to fix Social Security.
From the reaction, though, you would have thought Greenspan, who's about to turn 78 himself, had suggested taking old people out and shooting them. No matter what was said in Washington just this morning, the wrong way to cut the deficit is to cut Social Security benefits, said Sen. John F. Kerry, D-Mass. If I'm president, we're simply not going to do it. Sen. John Edwards, D-N.C., said it was an outrage for him to suggest that we should extend George Bush's tax cuts on unearned wealth while cutting Social Security benefits that working people earn. President Bush hastened to reiterate that he had no intention of changing benefits for those at or near retirement age ' Greenspan also had said he didn't want to make changes for that group ' and to restate his expensive proposal for private savings accounts.
Greenspan argues for making the Bush tax cuts permanent, and there we differ with him. Even without the tax cuts, Social Security was unsustainable; making all the cuts permanent deepens the hole. Indeed, Greenspan's modest but apparently incendiary suggestions underscore the magnitude of the challenge: The cost of the tax cuts would be about &
36;400 billion in 2014, while the adjustments he proposes, even under a generous interpretation, would save less than &
36;75 billion. But at least Greenspan ' unlike the president and his allies ' acknowledges the need for trade-offs. Bush won't admit that something's got to give; his Democratic rivals seem determined to compete in fiscal dishonesty. And they all pretend to offer leadership.