Charles Blahous has an important piece on the Republican presidential field. He writes:
As a public trustee for Social Security, I try to stay scrupulously neutral with respect to electoral contests. That said, I believe it’s important to keep a steady eye on how the issue plays out on the campaign trail. Election season is always a high-stakes time for Social Security policy, because how well the issue can be addressed in legislation is partly a function of developments during campaign season. . . .
In this context, how is the Social Security issue surviving the 2012 Republican presidential contest so far? In the main, pretty well.
He then divides the field into the good, the truly impressive, the bad and the ugly. Just because he doesn’t name names, doesn’t mean Right Turn can’t.
As for the “good,” he notes, “As a group the candidates have generally recognized Social Security’s challenges and have left open most policy options for dealing with them.” He also likes that “The campaigns have generally left the potential array of benefit and eligibility age changes in play. Maintaining this flexibility is important for any realistic Social Security solution. As for tax increases, at least one campaign declares that they ‘cannot be on the table.’ My personal policy views are in accord with that, and indeed it is possible for a few more years to fully resolve the Social Security shortfall without raising taxes or affecting benefits for those in or near retirement.”
Who’s he talking about here? Well, Texas Gov. Rick Perry, Mitt Romney and Rep. Michele Bachmann (Minn.) have all talked about solvency. Romney is the one who specifically nixed tax hikes.
On the “truly impressive,” Blahous writes: “Perhaps the most impressive thing that has emerged from the campaigns so far is that more than one has put forward specific proposals that would actually solve the shortfall. Specifically, these proposals would gradually change eligibility ages and slow the growth of benefits on the higher-income end.” He also notes: “So far the press has taken little notice of how impressive this is.” That must refer to Romney and Perry.
Perry’s plan comes with some goofy ideas (e.g., state opt-outs), but it also has a serious plan for indexing benefits according to the recipient’s income.
Moving on to the “bad,” Blahous bemoans some missteps:
Some promising reform proposals have been combined with other suggestions that would make repairing the shortfall more difficult. Others of the campaigns have focused too narrowly on personal accounts (invocations of both Chile and Galveston are rampant) as the sole or primary answer to Social Security’s problems. I have supported many past personal account proposals, but it’s important to remember that personal accounts only change the relationship between future contributions and future benefits.
That’s certainly a jab at Herman Cain (Chile!), Perry (Galveston!) and Newt Gingrich, who embraced both their ideas. In the CNBC debate, Gingrich was a prime offender, talking as if personal savings accounts would solve the whole mess. (“You deal with Social Security as a free-standing issue. And the fact is, if you allow younger Americans to have the choice to go to a Galveston- or Chilean-style personal Social Security savings account, the long-term effect on Social Security is scored by the Social Security actuary as absolutely stabilizing the system and taking care of it.”) As with so many items, Gingrich says very dumb things with great authority.
Blahous is also critical that none of the candidates has tried to take on “the current misguided policy of temporarily cutting payroll taxes as a stimulus measure, while financing Social Security instead with general revenues (income taxes).” In fairness to Romney, however, he has strongly criticized the payroll tax cut gimmick: “Look, I don’t like temporary little Band-Aids, I want to fundamentally restructure America’s foundation economically.”
Finally, Blahous points the finger as the “ugly”: “In every campaign season some statements miss the mark entirely, such as this one from a recent debate: ‘The key is there is $2.4 trillion in Social Security which should be off budget, and no president of the United States should ever again say because of some political fight in Washington, I may not be able to send you your check. That money is sitting there. That money is available. And the country ought to pay the debt it owes the people who put the money in there.’ ” A quick Google search reveals that Gingrich said this. What’s wrong with it? Blahous explains:
This answer is particularly bad because it implies that the only problem with Social Security is that politicians are reluctant to repay what has been deposited by workers into its Trust Fund. The statement is wrong in several different ways; Social Security is already off-budget, a sizable portion of that Trust Fund balance has nothing to do with any contributions made by workers, and Social Security faces a substantial shortfall even assuming that all of the bonds in the Trust Fund are fully honored. Presidential leadership requires leveling with the public on the reality that benefit promises and tax collections are simply out of balance, and that it’s not just a matter of politicians sitting on a mountain of cash.
Once again Gingrich was talking nonsense, and yet no one called him on it.
In the main, then, it’s fair to say that Gingrich and Cain do the worst in Blahous’s analysis. Perry is much better, aside from a few clunkers. And Romney does very well, with the exception that he hasn’t specifically called out the payroll tax plan because of the Social Security aspect. Again, Blahous hasn’t put the names on these categories, but it’s not too hard to figure out the good, the truly impressive, the bad and the ugly.