Editorial: Deeper look reveals flaws in proposal

Monday, Aug. 27, 2001 | 9:41 a.m.

Daniel Patrick Moynihan, co-chairman of President Bush's Social Security commission, chided reporters last week for asking what impact the federal government's projection of a much-reduced budget surplus could mean for Social Security's future. "I wish you wouldn't get too preoccupied with the day-to-day events," the former Democratic senator from New York said.

The commission should consider Social Security's long-term outlook, as Moynihan notes. But that doesn't mean the commission should casually dismiss the dramatic dip in this year's federal budget surplus, from an estimate of $275 billion in April to only $158 billion as of last week -- a plunge caused by Bush's tax cut and a sluggish economy. And it probably will get worse because the White House is suggesting it may want to dip into the Social Security trust fund to pay for more tax cuts.

It is truly alarming, as the budget surplus rapidly disappears, that Bush and the commission continue to support privatizing a portion of a recipient's Social Security payment. Privatization would cause the Social Security system to receive fewer payroll taxes and would add costs to administer the new privatized accounts. If there isn't a surplus available to offset these costs, then Social Security benefit cuts would have to be made to balance the books. Last week financial analysts for the Congressional Research Service reported that establishing private retirement accounts would require benefit cuts of between 4.7 percent to 10.8 percent starting in 2020.

There is plenty of skepticism about Bush's Social Security commission. All its members support privatization, which eliminates healthy debate over this issue. The commission also was hurt last week when it used a loophole in the federal open-meeting law to justify meeting in secret. Moynihan may not want to discuss some of the pesky facts that question the value of privatizing Social Security, but the commission should consider all information -- not just what it agrees with.