You are using an outdated browser.
Please upgrade your browser
and improve your visit to our site.
Skip Navigation

The T-bill Vote

In her interview late last week with Charlie Gibson, Vice Presidential nominee Sarah Palin made some less than savvy remarks about entitlements (which, quoth she, are “agencies” that must be “challenged to find efficiencies and spend other people’s money wisely”). Foremost among the big three entitlements, at least electorally, is the Social Security program, which Palin’s running mate John McCain has called “an absolute disgrace.” McCain has never clarified in which respect the program is a disgrace, merely ducking questions on which taxes he might raise, or benefits he might cut, in order to pay for his budget.

As of this morning however, there seems to be less cause to sniff at the 73-year old program. UChicago public health specialist Harold Pollack, writing at HuffPo, notes that Social Security “may be the only area of government that that's not in fiscal crisis right now.” Pollack takes us back to the long-running fight over the long-term health of Social Security:

Will this system survive? It's natural to wonder. Conservatives do their best to stoke our fears, presenting Social Security as a looming crisis by lumping it in with Medicare and Medicaid. In one of many examples, the Heritage Foundation warns of “trillions in future costs associated with Social Security, Medicare, and Medicaid, which the CBO projects could push the federal public debt to nearly 300 percent of GDP by 2050, and over 850 percent of GDP by 2082.”

Scary stuff. And it's not only conservatives trying to worry us. The front page of the July 8 Washington Post concluded "Candidates Diverge on How to Save Social Security." As the lead paragraph breathlessly put it, "Sens. Barack Obama and John McCain are both proposing dramatic changes to Social Security, taking on the financially fragile 'third rail of American politics' that Congress and recent presidents have been unable to repair."

I’m no expert, but wonder what on earth would have happened had the Social Security system been privatized, as was advocated by McCain in 2004 and again as recently as March 2008. With which tools would taxpayers have decided which trusty American investment house (a Lehman, or a Bear Stearns) would get their money? Would any of the gargantuan risk factors associated with such an investment have been transparent back then?

I think taking a swing (as Dean Baker has) on the games McCain-Palin is willing to play with Social Security is a useful back-to-the-kitchen-table strategy for the Obama campaign. If nothing else, an attack on this point allows voters over 50 who are fretting about both their retirement security and voting for a black man, to feel a little more certain that the Democratic candidate and his campaign have their interests in mind.

Update: Ezra Klein makes the same point over at TAP:

Three years ago, John McCain signed on to George W. Bush's efforts to privatize Social Security. He surveyed Wall Street and decided that it was a stable enough institution to entrust with the nation's pension funds. Three years ago. And this wasn't just an attempt to cozy up to Bush: McCain was arguing for privatization in 1999. So McCain's argument is that Wall Street is built atop an unstable regulatory foundation and is shot through with most of the seven deadly sins. That the situation has been allowed to fester so long is evidence that "people were asleep at the switch." Even so, McCain has consistently argued that much of Social Security should be turned over to...Wall Street. Either he wanted to tank the nation's pensions funds or he was one of the people asleep at the switch. But those are really the only two options here.

--Dayo Olopade