May 25, 2005
Why Oh Why Are We Ruled by These Idiots? (Social Security Edition)
The Bush administration's Social Security policy development process is definitely more mendacious or far less competent than Ira Magaziner's health care policy development effort in 1993-1994. For one thing, the Bushies either don't have or dare not release numbers. Jason Furman reports:
The Impact of The President's Proposal On Social Security Solvency And The Budget, 5/10/05: [T]he White House has not released the traditional analysis by the Social Security actuaries of the effect of its plan on Social Security solvency. It is standard practice for policymakers and outside analysts who present Social Security plans to provide the actuaries’ analysis when, or shortly after, they release their plans....
I and the people I talk to are undecided with respect to whether this failure to release numbers is because (a) the numbers are so scary and unfavorable that they dare not do so, or (b) there is still no agreement among the White House barons as to what the Bush Social Security proposal will be, hence nothing to analyze.
In either case, it's not encouraging: successful policy requires successful implementation of program details, and this crowd cannot even produce summary tables.
What would the effects of the Bush plan be? Jason Furman has come up with some estimates, which in the absence of others are our best guides:
In the absence of an analysis by the Social Security actuaries, this analysis provides some of the standard actuarial and fiscal estimates of the President’s proposal... based on the actuaries’ analysis of the Pozen proposal, which has been released, analyses by the actuaries of other private-account plans that contain features similar to those of the President’s plan, analysis by the actuaries of the President’s private accounts through 2015, and the data in the 2005 Social Security trustees report....
[W]hen both components of the President’s plan are examined... the plan... move[s] forward the year [of trust fund exhaustion]... from 2041 to 2030.... The plan also would accelerate the year in which the program begins to run cash-flow deficits from 2017 to 2011....
[T]he President’s plan as a whole... [would] close only 30 percent of the [projected] 75-year [Social Security funding] gap.... Additional benefit reductions, new revenues, or large transfers from the rest of the budget would be necessary to fill the substantial remaining gap.
It is a clown show, an episode of stupidity of a jaw-dropping magnitude:
1. The administration's Social Security gurus shove Bush out there with talking points saying that we need to act now to pass the Bush plan, because starting in 2017 Social Security will start taking resources away from the rest of the government and that's a very bad thing--and then they roll out a plan in which Social Security starts taking resources away from the rest of the government in 2011.
2. The administration's Social Security gurus shove Bush out there with talking points saying that passing the Bush plan is essential because if we don't the Social Security trust fund balance will hit zero in 2041, and big benefit cuts will then be necessary--and then they roll out a plan in which the Social Security trust fund balance hits zero in 2030.
3. The administration's Social Security gurus shove Bush out there with talking points about the importance of restoring actuarial balance to Social Security--and then they roll out a plan which closes less than a third of the 75-year funding gap (and refuse to specify the plan in sufficient detail to allow anyone to do a longer-run analysis).
Posted by DeLong at May 25, 2005 07:05 PM