Bush's real agenda for privatizing Social Security

There has been a lot of speculation about why President Bush has suddenly decided to "reform Social Security" (as he calls it, instead of the more commonly used term "privatization"). We have dealt with this issue in our article on why Bush wants to privatize Social Security and you may also want to read Vice President Cheney's argument for Social Security privatization and finally Gregory Mankiw's logic for reforming Social Security.

So if you believe the President and the reason that he is giving for why he wants to privatize Social Security and think that he truly cares about American people and American economy, then you need to read a leaked memo from Peter Wehner, President Bush's director of strategic initiatives, on the White House's plans for Social Security privatization. Most likely you will never hear any of the reasons in public, but below are extracts from the memo (with our comments in bold on top to convey the theme) that clearly indicate the reasons for this sudden buzz about Social Security privatization.

Let us pursue the conservative agenda to dismantle Social Security

"...this will be one of the most important conservative undertakings of modern times. If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever. The scope and scale of this endeavor are hard to overestimate...For the first time in six decades, the Social Security battle is one we can win -- and in doing so, we can help transform the political and philosophical landscape of the country...The President remains flexible on tactics -- and rock-solid on the principles. But there's nothing new there."

Create a sense of crisis and urgency, even if we have to make things up

"...the current system is heading for an iceberg. The notion that younger workers will receive anything like the benefits they have been promised is fiction, unless significant reforms are undertaken. We need to establish in the public mind a key fiscal fact: right now we are on an unsustainable course. That reality needs to be seared into the public consciousness; it is the pre-condition to authentic reform."

Personal retirement accounts is only a buzzword to sell the idea

"...our advocacy for personal accounts is tied to our commitment to an Ownership Society -- one in which more people will own their health care plans and have the confidence of owning a piece of their retirement. We simply cannot solve the Social Security problem with Personal Retirement Accounts alone. If the goal is permanent solvency and sustainability -- as we believe it should be --then Personal Retirements Accounts, for all their virtues, are insufficient to that task."

Let us reduce the benefits but do it by confusing Americans

"...we're going to take a very close look at changing the way benefits are calculated. As you probably know, under current law benefits are calculated by a "wage index" -- but because wages grow faster than inflation, so do Social Security benefits. If we don't address this aspect of the current system, we'll face serious economic risks."

Ride the morality train that started prior to the elections

"...we consider our Social Security reform not simply an economic challenge, but a moral goal and a moral good."

Recommended article: Social Security privatization basics for dummies