UNSOCIAL INSECURITY.(The Talk of the Town)

The Administration's campaign to do something about, or to, Social Security will get its prime-time launch next month in the State of the Union extravaganza, but President Bush is already busy softening up the battlefield. Last week, he granted his first newspaper interview since the election, to the Wall Street Journal, the parish bulletin of the nonevangelical wing of his political base. The first question was about his agenda for Social Security, and whether he would just be laying out general principles and leaving the details to Congress. "No, not necessarily so," he said, adding:

That's part of--that's part of the advice my new National Economic Council head will be giving me as to whether or not we need to--here is the plan, or here is an idea for a plan, or why don't you just fix it. I suspect given my nature, I'll want to be--the White House will be very much involved with--I have an obligation to lead on this issue--I think this will be an administrative-driven idea--to take it on. And therefore, that that be the case, I have the responsibility to provide the political cover necessary for members, I have the responsibility to make the case if there is a problem, and I have the responsibility to lay out potential solutions. Now, to the specificity of which, we'll find out--you'll find out with time.

Even a professional actuary might have trouble parsing that one. But the initial thrust of the Bush approach--as laid out in his own comments, in speeches and memos by various assistants, and in material put out by groups such as the Alliance for Worker Retirement Security--is clear enough. It has two big themes. First, Social Security is in crisis, running out of money, about to go bankrupt unless something drastic is done. Second, privatization--eliminating part of Social Security and replacing it with a system of individual private investment accounts financed from a portion of workers' payroll taxes--is somehow the key to avoiding the catastrophe, and is also a fine thing in its own right.

"This is one of my charges, is to explain to Congress as clearly as I can: the crisis is now," Bush proclaimed at an "economic summit" a month ago. He does indeed have some 'splaining to do. This year, the Social Security system--the payroll tax, which brings money in, and the pension program, which sends money out--will bring in about $180 billion more than it sends out. It will go on bringing in more than it sends out until 2028, at which point it will begin to draw on the $3.5 trillion surplus it will by then have accumulated. The surplus runs out in 2042, right around the time George W. Bush turns ninety-six. After that, even if nothing has changed, the system's income will continue to cover seventy-three per cent of its outgo.

That's using the Social Security Administration's economic and demographic assumptions, which are habitually pessimistic. Using the assumptions of the nonpartisan Congressional Budget Office, the surplus runs out in 2052. And if one uses the economic growth assumptions that Bush's own budget office uses when it calculates the effects of his own tax cuts, the surplus runs out in--er, maybe never.

The "crisis," therefore, is not "now." It's as bogus as the Alliance for Worker Retirement Security--which, in reality, is an "astroturf," or fake-grassroots, front for the National Association of Manufacturers. There is no Social Security crisis, and there is not likely to be one. At some point over the next couple of decades, of course, some adjustments will have to be made. There are many reasonable possibilities: a modest rise in the retirement age, to reflect increases in health and longevity; a rise in the cap on wages subject to the payroll tax, which now cuts out at ninety thousand dollars a year; adding ...