Tuesday, February 01, 2005

Evidence that Clinton MAY HAVE WANTED Social Security Privatized

From the Cato Institute

"Wilcox, Elmendorf, and Liebman confirmed what many in Washington have whispered about for some time, that, while some in the administration -- -notably Vice president Al Gore and Treasury Secretary Robert Rubin -- -strongly opposed individual accounts, Clinton leaned in favor of them. Indeed, Clinton had his staff consider whether the administrative structure for individual accounts could be set up before Congress acted on any legislation to ensure that the accounts would be in place before Clinton left office."

Clinton had ordered a study of Social Security Privatization and had worked on the issue with Sen. Moynihan.

From the San Francisco Chronicle:

Clinton even floated a proposal called USA Accounts that would have subsidized private accounts outside of Social Security, as a way to increase savings among low- and middle-income workers, most of whom save nothing and would be most at risk if Social Security benefits are reduced in the future.

Such "add-on" accounts have substantial appeal among Democrats in contrast to the accounts Bush talks about that would allow workers to divert part of their payroll taxes to pay for them. The add-on accounts, modeled on popular 401(k) accounts used by many higher-income workers, could provide heavy subsidies for savings by poorer workers.

Cato's interpretation isn't quite accurate. Bill Clinton supported private accounts AS AN ADD-ON PROGRAM. As my colleague pointed out, he also supported privatization of the TRUST FUND. It is unclear whether he supported a program of diversion into private accounts, although based on the structure of USA Accounts, it seems to contradict that idea.

The evidence that Bill Clinton supported Social Security reform along the lines it is being discussed today is sparse.

L-Hack, I feel bad about my biting remark earlier, so I'll throw you a bone. Bill Clinton used the phrase "Social Security Crisis" in 1998.


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