If you’re wondering what happened to moderate Democrats in Congress, try checking the board of directors at the Concord Coalition.
Founded in 1992 by retiring Senators Warren Rudman and the late Paul Tsongas, the Coalition has dealt exclusively with the budget deficit, Social Security, Medicare and Medicaid entitlements. Concord worked hard during the Republican Congress’s efforts at budget reduction after 1994 and played a big part in President Clinton’s Social Security fix in 1998.
Now its shining moment has come. After more than a decade of writing position papers and taking full-page ads in the New York Times, Concord finally has public attention riveted where it wants it to be.
So are there signs of an emerging bipartisanship?
“It’s not very promising,” says executive director Robert Bixby. “We used to have quite a few friends in Congress but now most of them are on our board.” Among them are former Senators Bob Kerrey of Nebraska, Sam Nunn of Georgia, Chuck Robb of Virginia, and John Danforth of Missouri (the only Republican), and former Democratic Congressmen William H. Gray III of Pennsylvania, Tim Penny of Minnesota, and J. Alex McMillan of North Carolina. Also advising Concord are former treasury secretary Robert Rubin, former federal reserve board chairman Paul Volcker, former White House counsel Lloyd Cutler, and former comptroller general Charles A. Bowsher — all veterans of the Carter and Clinton Administrations. (Volcker was retained by Reagan.)
“Not too many Democrats are making Social Security reform their issue,” says Bixby. “They’re not dealing with the problem.”
Former Senator Kerrey, now president of the New School University in Manhattan, is representing Concord in the press. In a February 1 op-ed in the Wall Street Journal, Kerrey criticized Congressional Democrats’ “Hell No, We Won’t Go” attitude toward Social Security reform. “It will be a shame if liberal voices, values and ideas are not brought into the debate initiated by President Bush’s proposal,” he chided.
Kerrey endorsed private retirement accounts and has even suggesting using federal funds to begin them at birth. “This would give even low-income Americans the longest possible time to accumulate wealth,” he says. While in the Senate, Kerrey introduced a bill that would give every child a $1,000 savings account at birth.
But few Democrats are even backing this idea. Instead, they are simply stonewalling.
“There’s really very little argument over the numbers,” says Bixby. “All of us are looking at the same figures from the Social Security Trust Fund Administrators’ Report. It’s just a matter of how you interpret them.”
Concord is scornful of New York Times’ columnist Paul Krugman and other liberal advocates who swear there is no crisis. “It’s all based on that illusory concept of the Trust Fund,” says Bixby. “The Trust Fund really has no economic significance. By 2041 it will still be fully solvent yet Social Security will be running a $370 billion annual deficit — about the size of the current federal deficit — and will be in free fall. It only gets worse after that.
“What really amuses me is when Krugman and others argue that, ‘even if we do nothing, by 2041 the system will still be able to pay 73 percent of its present commitments.’ Turn than around and say, ‘We’ll only have a 27 percent cut in benefits,’ and see how it sounds.”
WHERE CONCORD PARTS COMPANY with the President proposal is over borrowing to cover the “transition costs” — the funds that will be needed to cover the gap between when today’s young workers begin cutting their payroll contributions to fund their personal retirement plans and when those plans mature and start relieving the burden on the federal treasury.
Milton Friedman has argued the transition costs are a myth. “They’re nothing but the unfunded obligations of the system brought forward into the present,” says the Nobel Laureate.
“That may be true but transition borrowing has to be weighed against all the other borrowing the government is doing,” says Bixby. “Private retirement policies won’t begin having an impact on the federal budget until 2050. The federal deficit is headed over a cliff around 2030. There’s got to be discipline imposed long before that. It’s like wading out to a sand bar — you can drown long before you reach it.”
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