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Sen. Grassley R agrees

Sen. Grassley (R) agrees with Chairman Thomas that the president's Social Security phase-out plan may be in trouble.

From the Des Moines Register ...

Grassley, in a conference call with Iowa reporters, did not criticize Thomas' comments, and said that the "difficult political issue" likely will have to be handled by the Senate first rather than the House, and then in a bipartisan fashion.

That's in contrast to other controversial ideas that the Republican-controlled Congress has been able to approve in recent years, largely along party lines, such as Medicare prescription drug legislation and tax-cut packages.

"I told the president the other day he has been successful with his agenda because he had a Republican House to push it through," Grassley, an Iowa Republican, said, referring to a recent White House meeting.

In addition, budget rules assisted lawmakers, as well as help from some Senate Democrats, Grassley said.

With Social Security, that is not possible and 60 votes - which would mean some Democratic support - will be needed for any plan to be approved in the Senate, he said.

"Understand it's got to be bipartisan and the president has got to encourage that bipartisanship," Grassley said.

Surely, Stephen Moore's going to have <$NoAd$>something to say about this, right?

I noted this earlier.

I noted this earlier. But I just want to again direct everyone's attention to this website: www.thereisnocrisis.com

Whenever I scan that URL quickly I keep thinking it says something like therhinoceros.com. But, hey, that's just me.

As you can see, it's 'There Is No Crisis' spelled all as one word. And they're doing a great job collecting together all sorts of information -- the best reportage, the worst reportage and plenty of facts about Social Security and the effort to phase it out, all in one place.

George Will says today

George Will says, today, that there is no Social Security crisis, but proffers a new rationale: competition among fund managers.

"Voluntary personal accounts will allow competing fund managers, rather than a government monopoly on income transfers from workers to retirees, to allocate a large pool of money. This will enhance the economic dynamism conducive to an open society."

Even private-accounts-meister Newt Gingrich

Even private-accounts-meister Newt Gingrich bagging on the crisis claim? "The combination of higher birth rates and more immigration makes the United States the healthiest of developed nations. This is not a crisis," says the former Speaker, according to Bloomberg.

Rep. Phil English R

Rep. Phil English (R) of Pennsylvania says Chairman Thomas "played a very important role in reminding those involved in the debate that there are number of things we can do that will improve the solvency from Social Security, quite apart from the creation of individual accounts. And he also correctly and directly made it clear that individual accounts by themselves will only marginally improve the performance of the system overall."

Private accounts will only "marginally improve" Social Security. Can we bank that quote?

As we noted a

As we noted a bit earlier this evening (or, I guess, this morning -- whatever), we very much doubt Reps. Thomas and McCrery are really as open as they seem to want Democrats to believe to leaving Social Security and its funding base intact and finding their money for private accounts from some other source.

But I was just chatting with TPM reader JK. And as he notes, if you take what the Ways and Means Republicans are saying at face value, it's really something to behold.

Under the new Ownership Society, apparently, Republicans are so dead-set on letting people control their own money that they're going to go out on to the international capital markets and borrow a few trillion dollars so they can give it out to people so they can put it into the stock market. Of course, if individuals are more inclined toward conservative investment strategies they can purchase bonds and thus lend back to the Treasury the money the Treasury just borrowed so they could put it in stocks.

Of course, perhaps we're assuming too much. Perhaps they aren't planning to borrow the money but rather come up with some big new tax that will generate funds that they can then give back to people to invest in the stock market.

We were about to

We were about to start a Bob Rubin Watch, <$NoAd$>wondering when the Dems chief macro-economic policy mandarin would step up and give us his take on the president's phase-out bill. But our friend Sid Blumenthal gets him on the record to good effect ...

"It's a badly, badly flawed plan," Robert Rubin, the former secretary of the treasury and current Citigroup director, told me. "From a fiscal point of view it's horrendous. It adds to deficits and federal debt in very large numbers until 2060." He calculates that the transition costs of Bush's plan for the first 10 years will be at least $2 trillion, and $4.5 trillion for the second 10 years. The exploding deficit would have an "adverse effect on interest rates, an adverse effect on consumption and housing prices, reduce productivity and growth, and crowd out debt capital to the private sector. Markets could begin to lose confidence in fiscal policy. The soundness of social security will be worse".

Rubin adds that the stock market is hardly a sure bet. "You are not making social security more secure by subjecting people's retirement to equity risk. If you look at the Nikkei in Japan you get a sense of what can happen."

No member of the Faction he.

I guess Rubin's just too anti-market.

And remember, you don't need to be in Congress to be in the Fainthearted Faction. Associate memberships are available for other high-profile pols. Just ask Ed Rendell.

Hmmm. Republican Ways and

Hmmm. Republican Ways and Means Chair Bill Thomas says the Bush plan is a "dead horse". And Democratic backbencher Allen Boyd co-sponsors a private accounts bill with Rep. Jim Kolbe (R) of Arizona. So I guess both parties are equally disunited when it comes to the president's Social Security phase-out bill.

So says Tom Curry at the MSNBC website ...

At this point in the struggle over Social Security, neither Democrats nor Republicans are unified on what changes ought to be made. One Democrat, Rep. Allen Boyd of Florida, has signed on as a co-sponsor of Arizona Republican Rep. Jim Kolbe’s private accounts bill.

A Senate Democrat who will play an important role on the Senate Finance Committee, Sen. Blanche Lincoln of Arkansas, has discussed Social Security options with Sen. Lindsey Graham, R-S.C., who is trying to put together a bipartisan reform package.

A key House Republican offered some provocative views Wednesday. Ways and Means Committee chairman Rep. Bill Thomas opposed Kennedy’s idea of raising the FICA payroll tax. “Why do you have to fund it (Social Security) in that way? There are other ways to deal with the issue that are smarter.” This seemed to open the door to paying for Social Security from general revenue, an idea some Democrats also have favored.

Now, one might say that as the site keeping the rolls <$Ad$>current for the Fainthearted Faction and the Conscience Caucus, it is rather odd for us to deny that there is any internal disunity among Democrats on this issue.

But we are pressing -- and rightly so, I believe -- what can only be called a rather exacting (some chiefs of staff and press secretaries we've spoken to have used even more colorful or downright unkind phrases) standard for Democrats looking to exit the Fainthearted Faction. But it's certainly worth noting that every current member of the Faction -- with the exception of the poltroonish Boyd -- has spoken ill or skeptically of private accounts and says they're disinclined to support the president.

What they won't do is categorically say they don't support phasing out a portion of Social Security and replacing it with private accounts. They want to leave open a little wiggle room -- or in Sen. Lieberman's case more than that -- to give in to the president's blandishments and tender affections. And this, it seems to Mr. Curry, is the equivalent of a third of the GOP House caucus having panic attacks or breaking out in yet-to-be-diagnosed rashes when the word 'privatization' is mentioned.

I don't want to give the impression that that's the totality of Curry's article. He certainly addresses the Democrats clear opposition to the president's phase-out bill. Read the piece to get a full sense of what he's saying. But I think those three grafs speak for themselves.

In any case, this is one more reason why that band of ignominious wobblers, the Fainthearted Faction, should just be clear on whether they support a Social Security phase-out or not -- so reporters can't create misleading impressions about there being any equivalence between the disunity affecting Dems on this issue and that facing Republicans.

Theres an extremely interesting

There's an extremely interesting, really a must-read article in Thursday's Post about the evolving Social Security debate.

The essential development is that, at least in the House Republican caucus, Ways and Means Chair Bill Thomas's (R) comments weren't just some off-the-cuff mutterings to be discarded in the next day's papers. They are now affirmed and expanded upon by Rep. Jim McCrery (R) of Louisiana, the newly seated Chairman of the Ways and Means Social Security Subcommittee.

Just what Thomas and McCrery mean though gets even murkier and one could draw very different conclusions about what they are proposing depending on which part of the article you read. The rest of this post may be tough sledding; and I apologize for that. But it's from doing the best I can to disentangle what I suspect are intentionally confusing reports from off the Hill.

The piece begins with what the Post describes as a growing realization among many Hill Republicans that getting money for private accounts out of payroll taxes now destined for Social Security just may not be workable because of the level of opposition that approach has already churned up. McCrery's tack is to get radical tax reform (i.e., a national sales tax or other ideas) back into the mix to open up different possibilities for funding private accounts.

But in the Post's telling it's maddeningly difficult to figure out whether the Ways and Means Republicans are talking about leaving Social Security and its payroll tax base alone and finding other ways to fund private accounts or wbether they are trying to put the entire federal tax code on the table, thus turning the entire debate, and whatever clarity it had, on its head.

Hypothetically, if the whole payroll tax system were scrapped or fundamentally changed, there'd be no clarity on what sort of plan was diverting money from Social Security taxes or not, since the whole funding base of the system would have been done away with and replaced with something else.

Clearly there are Republicans on the Hill who want to put some give back into this rapidly-tightening legislative knot and get their version of tax reform on the table while they're at it.

But wait, there's more.

In the second half of the article, the author chats up Democratic Social Security mavens Sperling, Orszag and Emanuel, who say this new tack from Republicans is a good thing. They then go on to lay out the Democrats position. For them, it's private accounts so long as they're on top of Social Security rather than carved out from Social Security revenues -- the position we've discussed here at TPM many times.

In the Post's description, "Social Security would remain essentially unchanged as a stable, defined retirement benefit, but benefits could be slightly reduced and taxes slightly raised through a variety of mechanisms to keep it solvent as baby boomers retire." And then they say McCrery calls this assessment "right on."

So wait, have McCrery and Thomas just ushered the entire Republican majority into the Conscience Caucus? They're agreeing to leave Social Security intact as a defined benefit, near-universal government program and they'll set up private accounts with new funds from somewhere else?

Somehow I doubt that's what they're agreeing to.

Luckily, there's no reason to think the White House or DeLay's folks would be negotiating in bad faith or anything.

It is widely recognized

"It is widely recognized that without reform to the current Social Security system, it has little chance of survival through the next several decades."

A snippet from the online push-poll Rep. John Kline (R) of Minnesota is hosting on his House website.