Refiguring Social Security: Economists Add Their Numbers
Morning-after scrutiny of the bold Social Security plan President Bush outlined in his State of the Union address on Wednesday night turned up details that were not immediately apparent.
The president said that in 2018 the system would begin paying out more in benefits than it was receiving in taxes. By 2027, he said, the shortfall would be $200 billion. By 2033, he said, it would be $300 billion.
Here is what he did not say, according to calculations by Jason Furman, an economist who worked on Sen. John Kerry’s presidential campaign: Under Bush’s plan, Social Security benefits would begin to exceed tax revenue six years earlier, in 2012.
That is because some tax money would go not into Social Security, but into workers’ individual investment accounts.
On the benefits-revenues gaps of $200 billion in 2027 and $300 billion in 2033, the differences would actually be considerably larger: $300 billion in 2027 and $400 billion in 2033.
Furman also figured that assuming that the tax cuts of 2001 and 2003 became permanent, their cost in lost revenue would also exceed the Social Security shortfall. The cuts would cost $344 billion in 2027 and $377 billion in 2033.
Bush’s plan would not start until 2009.
EPA Accused of Predetermining A Finding On Mercury
The Environmental Protection Agency’s inspector general charged on Thursday that the agency’s senior management instructed staff members to arrive at a predetermined conclusion favoring industry when they prepared a proposed rule last year to reduce the amount of mercury emitted from coal-fired power plants.
Mercury, which can damage the neurological development of fetuses and young children, has been found in increasingly high concentrations in fish in rivers and streams in the United States.
The inspector general’s report, citing anonymous agency staff members and internal e-mail messages, said that the technological and scientific analysis by the agency was “compromised” to keep cleanup costs down for the utility industry.
The goal of senior management, the report said, was to allow the agency to say that the utility industry could do just as good a job through complying with the Bush administration’s “Clear Skies” legislation as it could by installing costly equipment that a stringent mercury-control rule would require.
Like the mercury proposal, the proposal on nitrogen oxides and sulfur dioxide incorporates a mechanism for trading pollution credits.