Senator Santorum: Making Social Security's costs explicit

[Reed Davis <rdavis2@ix.netcom.com>]

Senator Rick Santorum wrote:
>
>  1.  The essential "safety net," or progressivity, that Social
>      Security now provides must be preserved and enhanced;
>
>  2.  The disability, spousal, and survivor insurance program aspects
>      must remain in place forever;
>
>  3.  Any reform should offer solvency for the system in the long
>      run, not simply postpone insolvency;
>
>  4.  Since more Americans are already paying more in payroll taxes
>      to Social Security than in federal income taxes, payroll taxes
>      should not be increased;
>
>  5.  Any reform should improve the EQUITY for all participants, such
>      that there is a clear link between benefits and contributions;
>
>  6.  Any reform should enhance the rate of national and personal
>      savings;
>
>  7.  The costs of Social Security should be made explicit, and
>      thus any reform plan cannot rely on shifting tax burdens to
>      the future, budget double-counting, or similar fiscal
>      chicanery.
>
These do seem like reasonable values.  I was especially struck by the last
one.  What would you think of carrying this one step further and making the
costs of Social Security's basic functions explicit?  These basic functions,
as I see it, are safety-net, insurance, and retirement program.  Splitting
these functions up, at least in their accounting, would allow us to decide
explicitly the size and form of each function that we wanted to support.
In addition, it would clarify a number of issues.  For example, it makes
much more sense to measure the return on the retirement portion than on
the entire program.  Nobody should expect a return from a safety-net or
insurance.

In any case, it seems useful to look at the future projected debt levels
under each plan to help ferret out those which are resorting to some sort
of fiscal chicanery.  There may be other places to hide costs but the
federal debt seems to be a favorite one.  Following are the projected
levels of debt under current law and the Clinton Plan.  I know that your
plan is still in development but if you should have any estimates of the
projected debt levels under your plan, I would appreciate seeing them.
Thank you.

Projected debt in    Gross   Gov't  Public
2004 ($billions)      Debt    Debt    Debt
------------------  ------  ------  ------
Under current law   5874.4  2947.9  2926.4
Under Clinton Plan  6776.0  3486.3  3289.6

Source: U.S. Budget, FY 2000; Table 12-2, Summary Table S-14

Reed Davis