UNTRUSTWORTHY.(The Talk of the Town)(Social Security and trust funds)

As an institution, the trust fund has been good to the Bush clan. Thanks to this ingenious financial tool, through which part of a family fortune can be protected for its intended beneficiaries, George W., among other Bushes, has been spared some of the material difficulties that afflict so many of their fellow-citizens. It is the trust fund that, in part, has allowed members of the family to follow their dreams.

Another sort of trust fund, the one associated with Social Security, has likewise been good to America's ruling dynasty. True, the direct disbursements are relatively trifling: although the checks go out to Poppy and Bar, as they do to thirty million other retirees, the amounts are probably insufficient to pay lawnmowing and pool expenses at Kennebunkport. But the political benefits, especially to their firstborn son, have been formidable. The Social Security system consists of, on the one hand, a disbursement mechanism that provides modest but dependable incomes to the elderly and the disabled and their survivors and dependents, and, on the other hand, a funding mechanism, a 12.4-per-cent flat tax on wages up to ninety thousand dollars a year. The difference between the two goes into (or comes out of) the Social Security trust fund, which has grown dramatically over the past twenty years. In tandem with the Clinton Administration's fiscally responsible budgeting, the trust fund's growth pulled the entire federal budget out of deficit from 1998 to 2001. Those trust-fund-driven budget surpluses, in turn, enabled George W. Bush, first as a candidate and then as President, to sell (falsely, it turned out) his program of tax cuts for the comfortable as a freebie. And the trust-fund surplus kept this year's budget deficit down to a scary $412.1 billion, rather than the scarier $563.2 billion it would be without it. You would think, therefore, that the President would speak respectfully of the Social Security trust fund. But no.

Bush had a press conference last Wednesday morning, and he was in a bouncy mood. The news from the Middle East has been better of late, and no doubt that was part of it. But he also seemed to be emotionally distancing himself from the fate of his proposal to privatize Social Security, which has been looking increasingly dubious. He described privatization as "an interesting idea, and one that people ought to discuss." And he admitted, more clearly and more cheerfully than he had before, that "personal accounts do not solve the issue," by which he meant the system's long-term solvency. He's right about that. Personal accounts would not "solve" that "issue," just as pouring the contents of one's canteen onto the sand would not solve the issue of thirst in the desert.

Then, feeling expansive, the President got around to the trust fund:

You know, one thing about Social Security--I'm sorry to blow on here, but now that you asked--a lot of people in America think there is a trust: your money goes in, the government holds it, and then the government gives your money back when you retire. That's just not the way it works. . . . And right now, we're paying for a lot of programs other than Social Security with the payroll tax coming in, thereby leaving a pile of IOUs.

Bush has made this point before. "Some in our country think that Social Security is a trust fund," he said a few weeks ago. "In other words, there's a pile of money being accumulated. That's just simply not true. . . . There is no trust." The point is a regular part of the stump speech he has been delivering around the country in his campaign to "reform" (that is, phase out) Social Security in favor of--well, the details will be forthcoming eventually, or maybe they ...