Sunday, February 12, 2006

Social Security Privatization: It's Back

Stygius has picked up on something I hadn't noticed: President Sluggo included Social Security privatization in his proposed budget. Even though he made no mention in his State of the Union address, our president included funding for his hairbrained scheme. But business columnist Allan Sloan from the Washington Post directed our attention to it:
"The Democrats were laughing all the way to the funeral of Social Security modernization," White House spokesman Trent Duffy told me in an interview Tuesday, but "the president still cares deeply about this." Duffy asserted that Bush would have been remiss not to include in the budget the cost of something that he feels so strongly about, and he seemed surprised at my surprise that Social Security privatization had been written into the budget without any advance fanfare.
Duffy said privatization costs were included in the midyear budget update that the Office of Management and Budget released last July 30, so it was logical for them to be in the 2007 budget proposals. But I sure didn't see this coming -- and I wonder how many people outside of the White House did.
Nevertheless, it's here. Unlike Bush's generalized privatization talk of last year, we're now talking detailed numbers. On page 321 of the budget proposal, you see the privatization costs: $24.182 billion in fiscal 2010, $57.429 billion in fiscal 2011 and another $630.533 billion for the five years after that, for a seven-year total of $712.144 billion.
In the first year of private accounts, people would be allowed to divert up to 4 percent of their wages covered by Social Security into what Bush called "voluntary private accounts." The maximum contribution to such accounts would start at $1,100 annually and rise by $100 a year through 2016.
"Damn the deficits, full speed ahead!" seems to be the motto. Perhaps the proposed Division of Dynamic Analysis in the Treasury Department will be tasked with explaining how this $712 billion in additional outlays will actually reduce the federal deficit and make us all rich while we're at it.

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