[Mb-civic] washingtonpost.com State of the Union

[Michael Butler]

washingtonpost.com
State of the Union



Thursday, February 3, 2005; Page A26

LAST NIGHT'S State of the Union address was to be the moment, so the country
was told, when President Bush would spell out his plans for Social Security.
That turned out to be true, in part. Mr. Bush's speech, combined with
additional information put out by the White House, for the first time
described the size and structure of the private retirement accounts the
president envisions. But Mr. Bush and his aides offered no specifics on the
more difficult question of what changes would be made elsewhere in Social
Security to make the program solvent. Mr. Bush acknowledged that hard
choices will have to be made. But rather than leading on that central issue,
he simply offered a list of what he described as other people's ideas. He
made a persuasive case that the Social Security program needs to be put on a
stronger financial footing, but he wouldn't say how that should be done.

The personal accounts Mr. Bush advocated are intelligently structured in
many ways. The requirement that workers, on retirement, use at least part of
their money to buy annuities to keep them above the poverty level; the
prohibition on workers withdrawing money before retiring; the default
investment plan of a "lifestyle account" that would shift workers, as they
age, into less risky investment blends -- all of these are sensible
approaches.

But Mr. Bush and his aides also put out numbers that made the transitional
costs of creating private accounts look artificially low, saying that the
amount diverted from the Treasury during the next 10 years would be just
$754 billion, including interest costs. Because the accounts would be phased
in beginning in 2009, that number is misleading. And Mr. Bush made private
accounts look like a no-lose proposition, saying, "Your money will grow,
over time, at a greater rate than anything the current system can deliver."
That may be true for many account holders, but Mr. Bush didn't address what
would happen to those who do not fare as well.

The address was well-delivered and less of a laundry list of proposals than
many of its predecessors. Mr. Bush did take pains to assuage the cultural
conservative part of his base by repeating his call for a constitutional
amendment to prohibit gay marriage; we preferred his commitment to increase
the size of Pell grants and to bolster the legal defenses of accused
criminals. The speech was also notable for the policy dogs that didn't bark
or were far more muzzled than in previous years. Mr. Bush's previous clarion
call to make his tax cuts permanent was reduced this year to a four-word
clause. Tax reform got only a brief nod; climate change wasn't mentioned;
discussion of immigration reform was limited to a restatement of his
previous, dormant proposals.

Mr. Bush did not address foreign affairs until he was well past the midpoint
of his speech. Reprising his inaugural pledge of a campaign for democracy in
the Middle East and beyond, he described his commitment to Iraq as "firm and
unchanging" and cited last weekend's elections as a demonstration that "we
will succeed." He ruled out, as he should have, the "artificial timetable"
for withdrawal that some Democrats have called for, while hinting at a
gradual lessening of the U.S. military role during a new phase that will
focus on training Iraqi forces.

Elsewhere in the Middle East, Mr. Bush promised aggressive support for
Palestinian institution building, including $350 million in new aid, and
described what sounded like a push for regional transformation on two
tracks: confrontation with such hostile authoritarian regimes as Syria and
Iran, and gentle prodding of allies such as Egypt and Saudi Arabia.
Remarkably, almost all the world outside the greater Middle East -- Russia,
China, Africa, Latin America -- went unmentioned. Disappointingly, so did
U.S. foreign aid beyond Palestine. Those topics appeared to fall victim to
Mr. Bush's desire to refocus attention on domestic policy, an ambition that
a still-dangerous world may complicate during the coming year.

© 2005 The Washington Post Company
Advertising Links    What's this?
Home Owners - Don't Miss Out
Get $150,000 loan for $690 per month. Refinance while rates are low.
www.lowermybills.com
MyCashNow - $100 - $1,000 Overnight
Payday Loan Cash goes in your account overnight. Very low fees. Fast
decisions. Direct deposit is not required. No credit check. Confidential -
secure.
www.mycashnow.com
LendingTree.com - Official Site
Lendingtree - Find a mortgage, refinance, home equity or auto loan now.
Receive up to four loan offers within minutes. When banks compete, you win.
www.lendingtree.com