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March 29, 2005

A glimpse into the Democratic mind

Great column this morning from Brendan Miniter on the Wall Street Journal's "Opinion Journal" site, based on a conversation with House Democratic whip Steny Hoyer. It reveals the full extent of the partisan cynicism of the Democrats' blocking strategy against Social Security modernization, and the full extent of the risk if the Democrats get control of the process. A couple gems:

• "Mr. Hoyer wouldn't put a clear plan on the table, saying that in this fight the side that puts out a detailed plan first will likely lose. President Bush is "tanking" on this issue, he said, and Democrats aren't going to help him out by giving Americans something else to focus on and pick apart."
• "The No. 2 Democrat in the House said that he is in favor of private accounts as an "add-on" to Social Security. He also said that Social Security trustees--one of whom is Labor Secretary Elaine Chao--should be given the authority to invest Social Security funds in the stock market and other high-yield financial instruments. Instead of personal accounts, Mr. Hoyer is envisioning public accounts controlled by the government and used to raise funds for Social Security, much the way Calpers invests funds to pay for California state employee pensions."
• "...by supporting add-on accounts and calling for Social Security trustees to be able to invest in the market, Mr. Hoyer has given up the argument that the stock market is too risky to invest in. If it's good enough for 401(k)s, public accounts and private add-on accounts, why isn't the stock market good enough for the rest of Social Security?"
• "The danger in losing the Social Security fight this year isn't that President Bush's reform agenda will die along with it, but rather that it will live on. President Clinton had to be brought to welfare reform kicking and screaming. But President Hillary or another Democrat will likely be more shrewd and embrace reform. Doing so would allow Democrats to infuse those reforms with Mr. Hoyer's ideas of using the government to invest funds in the stock market. We'll likely get a mix of higher taxes, reduced benefits for some, and "diversified risk" with publicly invested money. It will sound like a middle-of-the-road compromise. But if it comes to pass, it will give the secretary of labor and the other trustees a new tool to influence financial markets for political reasons."

Posted by Don Luskin at March 29, 2005 7:59 AM | Print

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