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Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

Articles by Josh

A new member of the Senate's Fainthearted Faction: Sen. Blanche Lincoln of Arkansas.

Notwithstanding Sen. Arlen Specter's declared opposition to a private-accounts-based Social Security phase-out, Sen. Lindsey Graham is putting together a working group of six senators (seven, including Graham) "seek[ing] agreement on a bipartisan blueprint for shoring up Social Security, preferably before President Bush outlines his plan and partisan lines harden in Congress."

So reports Thursday's Wall Street Journal.

The six include 2 Republicans and 4 Democrats. And Graham is holding the meetings with the "encouragement" of the White House.

The Senators are Republicans Charles Grassley of Iowa and Judd Gregg of New Hampshire. The Democrats are Max Baucus of Montana, Blanche Lincoln of Arkansas, Joe Lieberman of Connecticut and Ben Nelson of Nebraska.

In March 2002, Sen. Lieberman called "privatization" a "dangerous mistake."

"Social Security privatization," he said, "would take away the safety from the safety net, and turn the idea of a rainy day fund into a sink or swim proposition."

"We understand Social Security's economic value and appreciate its moral value," he wisely observed, "and that we won't let it be diluted, dismantled or dissolved."

I couldn't agree more. And yet the president has made clear that any plan must include privatization, a private-accounts-based partial phase-out of Social Security.

So what is there to talk about exactly?

On October 21st 1998, when first running for senate, Sen. Lincoln called privatization "dangerous" and made opposition to it a key plank in her campaign.

So, again, what is there to talk about?

Why are we picking on Faction newcomer Sen. Lincoln and not Sen. Baucus, you ask?

Because Baucus seems to have bailed out. Notwithstanding his participation in the meetings, the Times reports Baucus "said on Thursday that he would oppose the president's Social Security plan this year."

In an interview with the Times, Baucus, who provided the president key support on the 2001 tax cut bill and the Medicare bill, said, ""I seriously doubt I'm going to be the linchpin this time ... [private accounts will] exacerbate the problem, not solve it."

Meanwhile, according to the Washington Post, a telling division is emerging between Senate and House Republicans.

While Senators like Chuck Grassley, Lindsey Graham and others believe the "White House should leave it to Congress to work quietly on a bipartisan Social Security package that is not explicitly the president's," House leaders are sending a very different message. According to the Post, they're insisting that "the president has to issue a detailed plan to restructure Social Security and add personal investment accounts, then sell it himself before he could possibly hope to get broad Republican support."

And what's the big difference between the Senate and the House? Right. The folks in the House all have to face the voters next year. Most in the senate don't have to for three or five years. And the president never.

And as long as we're on the subject, which party seems more divided over this issue?

Alberto Gonzales believes that the president can immunize individuals for committing acts of torture and that he has the power to authorize violations of criminal law. That's how Chris Suellentrop interprets what Gonzales said today on the Hill in Slate. And he makes a very persuasive case.

And this is the man who will soon be the highest ranking law enforcement officer in the land.

It defies comment.

Here's an overnight Associated Press piece entitled "Bush Pledges to Lead on Social Security." It has most of what you'd expect and then <$NoAd$> this ...

Though Republicans have increased their majority in both houses, changes would require clearing a hurdle of 60 votes in the Senate.

Underscoring that difficulty, Sen. Arlen Specter, a prominent Republican moderate, has expressed his opposition to cuts in promised Social Security benefits for future retirees

"I strongly oppose this approach," Specter says in a letter on his official Web site. The Pennsylvania Republican did not state a position on investment accounts.


No position on private accounts? Try digging a little deeper. As we reported earlier today, Sen. Specter has taken a very definitive position on privatization and private accounts: He's against them.

In the penultimate graf of the letter his office is currently sending out in response to queries from constituents, Specter writes ...

On the issue of privatization, I had some time ago considered an idea to place a relatively small portion of benefits in an investment account, providing that the “security” aspect of Social Security was retained and the investment was under professional management. However, with the severe fluctuations of the stock market, I have since rejected that idea.


And this is as you'd expect since this is the position he clearly enunciated during the campaign this year when he was running against Rep. Joe Hoeffel. As he said at the WTAE-TV debate in Pittsburgh on October 2nd, according to the AP ...

"At one time I had considered a small portion of Social Security in private accounts," Specter said during the hourlong debate at the WTAE-TV studio in Pittsburgh. But after a closer examination, "I think it is unwise," he said. "I believe the seniors ought to be reassured that their Social Security benefits are solid."


So notwithstanding the report in tonight's AP piece, I think Sen. Specter is being quite clear on his opposition to private accounts. He stated his opposition during the heat of the campaign. And he's making the point now even more clearly in the letter he's sending constituents, now that he doesn't have to face voters against for another six years, if then even. As Specter himself says, he has "rejected" the idea of private accounts.

This just keeps hanging out there. Part of the package in the complete evisceration of the House ethics rules, which the Republicans planned but then pulled back from passing, was canning Joel Hefley (R-CO) as Chairman of the Ethics Committee.

Hefley oversaw the serial admonishments of Rep. Tom DeLay. He disagreed with the DeLay Rule. And he thought the 'reforms' the House GOP caucus finally backed off passing were a bad idea. "This is not the way to effect meaningful reform. Ethics reform must be bipartisan and this package is not bipartisan," said Hefley.

So now the DeLay rules gone. And the ethics 'reforms', or most of them, are gone. But Hefley, well ... the grammatical symmetry doesn't work perfectly, but he's still gone too.

But there's a hold up, says the Post. No, there's no question that Hefley's out of there. But they can't make it official yet because Denny Hastert can't decide who to replace him with. "Hefley has fallen out of favor with GOP leaders and is not trusted by them to handle ethics cases that Democrats might bring against Republican lawmakers, according to aides," says the Post.

And the Post continues ...

One Republican official called Hefley's ouster "a defense measure." Aides said they did not know when the new chairman would be announced. By midweek, Hastert's staff had compiled a list of about 40 candidates.


A list of 40 candidates, eh? Sounds like they want someone really, really, really reliable. Defense measure, indeed.

A note from a reader ...

There are $1.8 trilliion <$NoAd$> in U.S. Treasury securities in the U.S. Social Security Trust Fund. It is imperative that the Democrats ask Bush whether he intends to honor that obligations and force him to make a public proclamation of his steadfast commitment to do so. The Democrats must take the lead in committing themselves to honor those obligations.

The Social Security Trust Fund is in fine shape with that $1.8 trillion dollar surplus.

It's the taxpayers obligation to the Trust Fund, (and the rest of the accumulated national debt that is the problem).

The Federal government should be paying down debt (not running $412 billion deficits) so it will have the borrowing capacity to pay off the obligations to the Trust Fund.

PRN


Not a bad idea. And the point the reader makes in the last graf is something everyone who is sane and can use a calculator should agree with. Come to think of it, that's what we were doing before George W. Bush became president ...

We're all familiar with the many blogs that follow the rough storms of national politics. But there's also an efflorescence of blogs that devote themselves to the politics of a particular state or city. I just heard today, for instance, about a new blog called Hall Monitor, run by the Time Argus/Rutland Herald Statehouse bureau chief, Darren Allen. In other words, if you want to follow Vermont politics, that'd probably be a good place to start.

Obviously, Allen is a professional newsman. But, just as on the national level, there are also a great number of passionate and committed amateurs who've set up their own sites to follow and/or affect politics in their neck of the woods.

Micah Sifry wants to set up a directory of these state and local blogs. So if you have one, or know of a good one, stop by here and drop him a line.

As we've said again and again, we're following the doings and shenanigans of the Fainthearted Faction for a very specific reason: we want all Democrats lined up in opposition to the president's Social Security phase-out bill, because that raises the stakes and puts the focus on those Republicans who might be scared to help phase-out Social Security without a good bit of bipartisan cover.

We don't want to assume only cynical motives. Some probably just don't want to be part of ending Social Security. And as we wrote late last month, that's why we're calling them the Conscience Caucus.

The concept is the same as the Fainthearted Faction, only inverted: these are the Republicans who seem most likely to leave President Bush waiting at the altar when he comes a'courtin' with his Social Security phase-out plan.

Now, we're pretty confident that the Caucus is going to be a good deal larger than the Faction. And many of those members are going to be reps. and senators who have their fingers to the wind and eyes on the polls seeing what looks safe and what doesn't. But today we've got a senator who seems to have committed himself to opposing the president's plan even before the whistle gets blown.

In response to constituent queries about his position on Social Security, Sen. Arlen Specter of Pennsylvania just started sending out an email outlining his position. In the email he professes his support for the program, his enchantment with the lockbox and various other points.

But the heart of the note is contained in two paragraphs (emphasis added) ...

As the baby boomer population ages and enters into retirement, the need for Social Security reform becomes even more apparent. Federal Reserve Chairman Alan Greenspan urged Congress in February of 2004 to deal with the country’s escalating budget deficit by cutting benefits for future Social Security retirees. I strongly oppose this approach.

...

On the issue of privatization, I had some time ago considered an idea to place a relatively small portion of benefits in an investment account, providing that the “security” aspect of Social Security was retained and the investment was under professional management. However, with the severe fluctuations of the stock market, I have since rejected that idea.


In the first graf quoted he rules out benefit cuts and in the second, unless I'm missing something, he categorically rules out privatization, i.e., private investment accounts funded by a carve-out from Social Security revenues.

So that's pretty much it. Specter isn't just in the Caucus. As long as he sticks by what he says in this letter to constituents, he's out of play completely for the president.

(Hold on to that Chairmanship with both hands, Arlen.)

A short note on Fainthearted Faction methodology.

First off, a great number of you are writing or emailing or calling your representatives and senators to express your concern or displeasure about their willingess to join with President Bush in phasing-out Social Security. And I know from direct knowledge, because I'm hearing from staff from many of those offices, that what you are doing is having a concrete, immediate and positive effect.

The following will be repetition for many of you. But let me take a moment to reiterate what gets folks in the Fainthearted Faction.

The list is not a list of people who have endorsed the president's plan. To the best of my knowledge, there is only one member of congress -- Rep. Allen Boyd of Florida's 2nd District -- who has endorsed the president's plan -- specifically, the version he is cosponsoring with Rep. Jim Kolbe (R-AZ). The Fainthearted Faction is made up of those senators and representatives who appear most likely to go along with the president in phasing-out Social Security.

Some in the House got on the list because of their vote against the Filner Amendment in 2001 -- a proxy vote on the privatization issue. Others are on the list because of their stated willingness to consider phasing-out Social Security. And in each case they are there because, as the debate has gotten underway, they've declined to make any clear and definitive statement that they plan to oppose the president's phase-out plan.

It's not a perfect science. There's judgment involved. But we've put in a lot of effort and consulted a lot of sources, both public and private, to focus in on this group. And we think it gives a good sense of whose votes are in play.

I'm very optimistic that most of these folks will finally end up opposing the president's phase-out plan. But as I noted last night and in other posts, for saving Social Security it is far, far more important that they go on record with their opposition now then a month, or six months or a year from now. And the reason they will do that is because they hear from their constituents who tell them that their equivocation on such a vital issue is something they find unacceptable.

Believe me, it is making a big difference. And it could scarcely be more important.

Okay, enough of my preaching. Just wanted to make that all clear.

In case you haven't seen it, here's the full text of the Wehner Memo (all formatting and emphasis from the original email) <$NoAd$> ...

From: Wehner, Peter H.
Sent: Monday, January 03, 2005 2:57 PM
Subject: Some Thoughts on Social Security


I wanted to provide to you our latest thinking (not for attribution) on Social Security reform.

I don't need to tell you that 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.

Let me tell you first what our plans are in terms of sequencing and political strategy. We will focus on Social Security immediately in this new year. Our strategy will probably include speeches early this month to establish an important premise: 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.

Given that, our aim is to introduce market reforms in Social Security and make the system permanently solvent and sustainable.

We intend to pursue the first goal by using our will and energy toward the creation of Personal Retirement Accounts. As you know, 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. Our goal is to provide a path to greater opportunity, more freedom, and more control for individuals over their own lives. That is what the personal account debate is fundamentally about -- and it is clearly the crucial new conservative idea in the history of the Social Security debate.

Second, 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.

It's worth noting that wage indexation was not part of the original design of Social Security. The current method of wage indexation was created in 1977, under (you guessed it) the Carter Administration. Wage indexation makes it impossible to "grow our way" out of the Social Security problem. If the economy grows faster and wages rise, this produces more tax revenue. But the faster wage growth also means that we owe more in Social Security benefits. This has produced a never-ending cycle of higher tax burdens, even during periods of robust economic growth. It is the classic case of the dog chasing his tail around the tree; he can run faster and faster, and never make any progress.

You may know that there is a small number of conservatives who prefer to push only for investment accounts and make no effort to adjust benefits -- therefore making no effort to address this fundamental structural problem. In my judgment, that's a bad idea. 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. And playing "kick the can" is simply not the credo of this President. He wants to do what needs to be done for genuine repair of Social Security.

If we duck our duty, it can have serious short-term economic consequences. Here's why. If we borrow $1-2 trillion to cover transition costs for personal savings accounts and make no changes to wage indexing, we will have borrowed trillions and will still confront more than $10 trillion in unfunded liabilities. This could easily cause an economic chain-reaction: the markets go south, interest rates go up, and the economy stalls out. To ignore the structural fiscal issues -- to wholly ignore the matter of the current system's benefit formula -- would be irresponsible.

Here's a startling fact: under current law, an average retiree in 2050 would be scheduled to receive close to 40 percent more (in real terms) in benefits than an average retiree today -- and yet there are no mechanisms in place to produce the revenue to pay out those benefits. No one on this planet can tell you why a 25-year-old person today is entitled to a 40 percent increase in Social Security benefits (in real terms) compared to what a person retiring today receives.

To meet those benefit levels, one option would be to raise the age at which people receive benefits. If we followed the formula used when Social Security was first created -- make the age at which you receive Social Security benefits above the average age of mortality -- we'd be looking at raising the benefit age to around 80. That ain't gonna happen.

Another way to meet those benefit levels is through the traditional Democrat/liberal way: higher taxation. According to the latest report of the Social Security Trustees, the current system's benefit formula would require some $10 trillion in tax increases over the long term. We'd therefore need to raise the payroll tax almost 20 percent simply to provide wage-indexed benefit levels to those born this year.

This will all sound familiar. In the past, the way Congress usually addressed the built-in funding problem was by raising payroll taxes (from 2 percent in 1937 to 12.4 percent today). In fact, Congress has raised Social Security taxes more than 30 times -- but it has never addressed the underlying problem. Avoiding the core issue by raising taxes is not the modus operandi of this President.

The other key point, as you know, is that personal accounts, through the miracle of compound interest, will provide workers with higher retirement benefits than they are currently receiving from Social Security.

At the end of the day, we want to promote both an ownership society and advance the idea of limited government. It seems to me our plan will do so; the plan of some others won't.

Let me add one other important point: we consider our Social Security reform not simply an economic challenge, but a moral goal and a moral good. We have a responsibility to fulfill the promise of Social Security, not undermine it. And we have a duty to ensure that we do not create an inter-generational conflict -- which is precisely what will happen if the Social Security system is not reformed. We need to retain strong ties between the generations, which is of course a deeply conservative belief.

The debate about Social Security is going to be a monumental clash of ideas -- and it's important for the conservative movement that we win both the battle of ideas and the legislation that will give those ideas life. The Democrat Party leadership, the AARP, and many others will go after Social Security reform hammer and tongs. See today's silly New York Times editorial (its only one for the day) as one example. But Democrats and liberals are in a precarious position; they are attempting to block reform to a system that almost every serious-minded person concedes needs it. They are in a position of arguing against modernizing a system created almost four generations ago. Increasingly the Democrat Party is the party of obstruction and opposition. It is the Party of the Past.

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. We have it within our grasp to move away from dependency on government and toward giving greater power and responsibility to individuals.

There are of course other important issues dealing with Social Security; for now, though, I've covered quite enough ground. I wanted to let you know where things stand. If you have any questions, or if we can send you anything to clarify our plans and respond to critics, just let me know. The President remains flexible on tactics -- and rock-solid on the principles. But there's nothing new there.

In one of his last public acts of an extraordinary public life, the late Democratic Senator from New York, Daniel Patrick Moynihan, co-chaired the President's Commission to Strengthen Social Security. In the introduction of its report, Senator Moynihan (along with Richard Parsons, his co-chair) wrote, "the time to include personal accounts in such action [reforming Social Security] has, indeed, arrived. The details of such accounts are negotiable, but their need is clear.... Carpe diem!"

And so we shall.


Get out your red pens.

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