Social Security

There are two views on social security reform in the Washington papers. Here is some of what can be found in the Washington Post :

President Bush's congressional allies on Social Security are limping into the week-long Memorial Day recess, battered by public opinion polls yet hopeful that a rising awareness of Social Security's long-run financing problems will propel a legislative solution.

The Washington Times says:

Most likely voters continue to support President Bush's proposal to let younger workers invest some of their Social Security payroll taxes through personal accounts, a new survey finds.

The poll by independent pollster John Zogby for the Cato Institute, which is being released today, found that when voters understood the benefits of personal investment accounts, including a better financial rate of return than the current system, the Bush plan was supported by 52 percent of Americans and opposed by 40 percent.

"The thing that is compelling in this poll is that this is the response you get when you use a positive approach on Social Security reform," Mr. Zogby said. "If you use the 'Chicken Little, sky-is-falling' approach, then voters understand that something has to be done, but don't see the connection between personal accounts and fundamental reform of Social Security.

And, there's a commentary by Michael Tanner at Cato:

How many times during the recent debate over Social Security reform have you heard someone refer to Social Security's "guaranteed benefit"? The AARP says "Social Security is the guaranteed part of your retirement plan." Nancy Pelosi, the Democratic leader in the House, touts the system's "guaranteed retirement benefit." The liberal activist group ProtectYourCheck.org, headed by former Clinton chief of staff Harold Ickes, is running ads calling Social Security "a guarantee you earned."

But Social Security benefits are not guaranteed.

They are not guaranteed legally because workers have no contractual or property rights to any benefits whatsoever. In two landmark cases, Flemming v. Nestor and Helvering v. Davis, the U.S. Supreme Court ruled that Social Security taxes are not contributions or savings, but simply taxes, and that Social Security benefits are simply a government spending program, no different than, say, farm price supports. Congress and the president may change, reduce, or even eliminate benefits at any time.

Our system of political economy is surely a wonder. Some say social security is a guarantee, virtually an individual right. Others point to Court opinions and say social security offers no such guarantee, no such individual right. Some say that according to polls people don't like "the Bush plan," and others say that according to polls people like "the Bush plan." Public policy debates are characterized by vast differences in the perceptions of what is reality, what is true, and yet our system of political economy works. I wonder.