>In _A Better Third Way_, Kahlenberg and Teixeira
>http://www.thenation.com/doc.mhtml?i=20010305&s=kahlenberg
>
>say without references that "Current DLC documents call for
>privatizing Social Security."
>
>What's the truth of that assertion?
Here's what DLC poobah Will Marshall said a couple of years ago <http://www.ndol.org/ndol_ci.cfm?cp=2&kaid=125&subid=165&contentid=1307>
Elements of the "Grand Bargain"
Despite his impeachment ordeal, President Clinton still can make a vital contribution to breaking the impasse on Social Security. As the centerpiece of his 1999 State of the Union Address, he could offer a "grand bargain" that addresses the traditionalists' legitimate qualms about market risk and overhead costs and the modernizers' equally valid desire to empower workers.
In such a bargain, the President could reaffirm his commitment to preserving the system's social insurance for the disabled and survivors, for which there remains no plausible private alternative; and challenge the modernizers to back reforms aimed at strengthening Social Security's basic guarantee against poverty, both by raising the minimum benefit all retirees get and changing outdated formulas that produce high poverty rates among elderly women, especially widows.
By lifting the "floor" for everyone -- and thereby guaranteeing that no low-wage worker would be made worse off by market-based reform-- the President would stand on solid ground in challenging the traditionalists' premise that only by investing the money itself could government shield individuals from undue market risk. Washington can provide further safeguards by emulating the Federal Thrift Savings Plan, which limits federal workers' choices to rule out investments that are overly conservative or too risky. The plan also offers a model for keeping overhead down: Have Social Security continue to collect all payroll tax revenue and transfer some portion to individual accounts designated by workers.
Finally, the President should challenge both sides to ensure the system's solvency while also financing the transition to a partially funded system. It makes sense to dedicate a healthy chunk of future fiscal surpluses to this purpose. In addition, Congress should embrace a gradual increase in the retirement age to 70 by 2030, in keeping with advances in the average life span of older Americans. The best way for boomers to help solve the problems their retirement will create is to work longer, keeping the work force from shrinking as rapidly and boosting payroll tax revenues. Less dramatic but still important ways to close the funding gap include bringing state and local employees into the system and adjusting the Consumer Price Index downward.
Among the welter of reform proposals crafted in recent years, the one that comes closest to embodying such a "grand bargain" is the 21st Century Retirement Security Plan issued last summer by the National Commission on Retirement Policy. The plan also has the crucial virtue of being bipartisan-- the commission's congressional co-chairs were Democrats Breaux and Rep. Charles Stenholm (Texas), and Republicans Sen. Judd Greg (N.H.) and Rep. Jim Kolbe (Ariz.).
Renegotiating the Social Compact
The grand bargain sketched here would renegotiate, not abandon, the social compact implicit in Social Security. It would offer working Americans new opportunities to build personal wealth while asking them to take greater responsibility for their retirement security. It would convert Social Security from an entitlement based on the false promise that everyone can consume more than they produce to a system that promotes savings, investment, and greater economic self-reliance. And it would embody a newapproach to governing based on a key New Democrat insight: That in the Information Age, government's role is not to take care of us, but to give us the tools we need to take care of ourselves and each other.