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The Courage of an Old Liberal

© Frank Monaldo

"Somehow Liberals have been unable to acquire from life what Conservatives seem to be endowed with at birth: namely, a healthy skepticism of the powers of government agencies to do good." - Senator Patrick Moynihan.

Franklin Roosevelt used the social turmoil of the Great Depression to institute perhaps the nation's most effective anti-poverty program, Social Security. The program in large measure alleviated poverty among the elderly. Liberals can be justly proud of this achievement.

Nonetheless the notion was nurtured, mostly by conservatives, that the act was actuarially unbalanced. After a time it became clear that benefits rates and demographics would eventually conspire to impose large social security tax burdens particularly on the middle class. Many young workers believe that either Social Security will not exist when they retire or will pay a near zero rate of return on their years of investment.

The first Social Security crisis occurred in the early 1980s. In 1981, President Reagan's budget director gravely warned that, "Unless both the House and the Senate pass a bill in the Congress which can be signed by the President within the next fifteen months, the most devastating bankruptcy in history will occur on or about Nov. 3, 1982." Even allowing for typical political hyperbole, the Social Security situation was serious. After a year, a presidential commission was unable to agree on a bi-partisan solution. Politics prevailed over prudence.

In a recent speech at the John F. Kennedy School of Government at Harvard Universtiy, Senator Patrick Moynihan recalled that at this crucial juncture in the early 1980s Senate Leader Bob Dole declared:

"...Social Security overwhelms every other domestic priority. Through the combination of relatively modest steps including some acceleration of already scheduled taxes and some reduction in the rate of future benefit increases, the system can be saved."

Moynihan took Dole up on his rhetoric and 13 days later an agreement emerged.

Courage begets courage and reconsideration of life-long perceptions begets introspection. Sixteen years after Dole's noble example, life-long Liberal Moynihan has proposed a significant restructuring of Social Security, bending it towards privatization in an effort to ensure the solvency of the system. Moynihan also seeks to reassure present day workers of Social Security's future viability.

Since current Social Security taxes exceed expenditures by $81 billion, Moynihan proposes that the difference be returned to workers now. This adjustment would result in a Social Security tax rate reduction from 12.4 percent to 10.4 percent. Moreover, the reduction

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