- The Washington Times - Thursday, March 10, 2005

Congressional Republicans have been tripping over one another en route to unveiling Social Security reform legislation. In the Senate alone, on the heels of fellow Republicans Lindsey Graham of South Carolina and Robert Bennett of Utah, GOP Nebraska Sen. Chuck Hagel submitted his proposal on Monday. While there is bipartisan agreement that Social Security has a long-term solvency problem, only Republicans seem willing to offer ideas about how to solve it. So, it is fair to ask: What reform plans are Democrats advancing?

Indeed, Chris Wallace on “Fox News Sunday” asked House Minority Leader Nancy Pelosi no fewer than four times for her “plan to solve [Social Security’s] long-term solvency” problem, which Mrs. Pelosi freely acknowledged. “The plan for solvency,” Mrs. Pelosi finally replied, “is to stop robbing Social Security of its money for other purposes. The plan is to return the money back to the trust fund.” Echoing the Democrats’ “plan” outlined by Mrs. Pelosi, Sen. Ted Kennedy insisted that the “first” requirement was for the president “to pay back into the Social Security [Trust Fund] all the money he’s diverted for his tax program.” Solidifying the Democratic position, Mrs. Pelosi said, “We must stop robbing Social Security’s trust fund of its money to pay for other things.”

April 15 is the deadline for Congress to approve a budget resolution for fiscal 2006. That means Mr. Kennedy and Mrs. Pelosi have about five weeks to demonstrate the courage of their convictions. Nothing prevents them from crafting their own budget resolution that meets their fundamental test. In other words, they should offer a budget resolution that “stop robbing Social Security’s trust fund of its money to pay for other things.”

What would such a budget look like? Before that can be answered, it must first be understood that the “unified” federal budget has two components: “on-budget” accounts and “off-budget” accounts. Social Security comprises virtually all of the “off-budget” accounts; the rest of the federal government is “on-budget.” Social Security is currently generating a substantial surplus (about $170 billion in 2006), which includes the intragovernmental interest payments to service previous loans that the Social Security trust funds have granted to finance operations of the rest of the federal government.

Now, to meet the Kennedy-Pelosi demand — to “stop robbing Social Security’s trust fund of its money to pay for other things” — the unified budget would have to reflect a surplus equal to Social Security’s off-budget surplus. That means the “on-budget” accounts must be in balance. But the Bush administration is projecting an “on-budget” deficit for 2006 of $560 billion. Add another $50 billion for so-far-unbudgeted outlays for Iraq and Afghanistan, and the likely “on-budget” deficit totals $610 billion. That’s the Kennedy-Pelosi target. Thus, to meet their target and to protect the Social Security surplus, they would have to propose a total of $610 billion in tax increases and spending cuts for 2006 alone.

Bridging the $610 billion gap with individual-income-tax increases alone would require raising those taxes by 63 percent. Spending too much money on national defense and in Iraq and Afghanistan? Unilaterally withdrawing from Iraq and reducing the rest of the defense budget by 25 percent would require additional budget cuts and tax increases of more than $425 billion.

If the self-righteous demand of Mr. Kennedy and Mrs. Pelosi to protect Social Security’s “off-budget” surplus is genuine, then they will produce their own budget to accomplish that. We look forward to perusing the $610 billion combination of annual spending cuts and tax increases Mr. Kennedy and Mrs. Pelosi will need to achieve their goal.

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