Social Security Private Accounts: An Add-On, Not a Carve-Out
Greg Ip finds former Bush Treasury Secretary John Snow saying that he was on our side of the Social Security reform debate--he thought private accounts should be add-ons rather than carve-outs too.
It would have been nice if he had signaled this at the time:
Washington Wire: A Bridge Too Far: Former Treasury Secretary John Snow says the Bush administration's first effort to overhaul Social Security failed because the Administration was "intransigent" on private accounts. Mr. Snow, who was Secretary of the Treasury from 2003 to 2006, says that the administration's insistence that a Social Security fix include private accounts carved out of the program shifted the focus away from making the retirement program solvent, and added that would have been better to propose private accounts on top of the existing program as some Democrats have suggested.
"You can't do health care reform or Social Security reform.... without a bipartisan consensus," Mr. Snow said at the Private Equity Analyst Outlook conference last week.... "If we made a mistake, it was not approaching it in more of a bipartisan way. We were pretty intransigent about the private accounts," he said.
Mr. Snow said the administration may have succeeded "If we had been a little cleverer and talked about augmentation of 401(k)'s, augmentation of private savings, but not by diverting money out of Social Security. I think that that was a winning formula. What wasn't salable was the fundamental argument that we make Social Security stronger for our children and grand children by diverting money out of it: putting it into private accounts, running up trillions of dollars of debt in the interim and it will all be okay in 2094," he said. "That was a losing argument."...
Current Treasury Secretary Henry Paulson, who succeeded Mr. Snow last year, is trying again to revive efforts to fix Social Security by reaching out to Democrats on Capitol Hill. But he has said that depoliticizing the issue so the next president can solve the problem may be the best he can do in the two years before Mr. Bush leaves office....
On a separate issue, Mr. Snow said, "I don't think a case can be made that Sarbanes-Oxley is making U.S. capital markets fundamentally less competitive," referring to the 2002 law that tightened the responsibilities and oversight of public corporations in the wake of the Enron and WorldCom scandals. Much of the loss of market share by U.S. capital markets, he said, reflects the natural, growing sophistication of other markets.... Mr. Snow said while Sarbanes Oxley should be re-examined, chief executives ought not to seek a wholesale change...
