Home Store In Memoriam Deborah Newsletter Forum Topics Blogfeed Blogroll Facebook MySpace Contact Us About

John Snow admits "We don't have a plan."

Reported by Chrish - December 21, 2004 -

Chris Wallace held Treasury Secretary John Snow's feet to the fire on Fox News Sunday 12/19, compelling the recently held-over Cabinet member to admit that the Bush administration doesn't have a plan for Social Security. Dogged questioning by Wallace exposed vagaries and contradictions delivered in an unsure and defensive tone. I must say I was impressed and tickled by the interview, but totally dismayed by the low level of competence and familiarity apparent on Snow's part.

First Snow said workers who put their SS$ into private accounts (we'll call them IRAs for Individual Retirement Accounts, no, wait, we already have them; we'll call them RISKs, for Retirement Investment Savings Kits) would be substituting benefits from said RISK accounts, which would grow faster than the build-up of benefits in the current system. Moments later he corrected himself saying the RISK accounts would at least have the opportunity to grow faster, and when pushed for clarification, that workers would be taking money out of a sure benefit and gambling (though that word was not used, oh no, we won't be hearing that one!) on a better return, Snow said to remember, it's all voluntary.

Comment: This brought me some clarity. Is Joe Shmoe going to go for the RISK? Not likely - in an unsure world, it's good to know you'll have at least a little income in your old age. The people who will opt out of paying SS taxes and put their share into a private account rather than the kitty are the people who can afford to, who don't really NEED the Social Security.

Chris Wallace asked what would happen in the event that a senior went for the RISK account and lost, and didn't have enough to make ends meet. Snow then said that the RISK accounts are a supplement to Social Security, an add-on, in addition. Wallace said No, you said it's a substitute. Snow said "you still can claim part of your social security" and Wallace agreed... so they're saying someone can divvy up their withholding into SS and RISKs. Snow said "these are going to be safe vehicles,...something like what government employees have with their thrift savings plans....which gives them 5 options, 5 prudent options in broad-based investment vehicles".

Comment: Flashback to Florida, Texas, Ohio and other states losing their retirement funds when Enron went bust. Extra credit: what else do those states have in common?

Getting around to the financing of this RISKy plan, Wallace briefly outlined for the totally clueless how SS funding works, wondered how the prez planned to finance the interim gap of up to 2 trillion dollars ($2,000,000,000,000.00) and asked Snow for confirmation that "this week the president ruled out any increase in payroll taxes. Is he talking about no increase in the payroll tax rate, or is he also talking about no increase in the so-called income cap, the amount of income subject to the payroll taxes which now tops out at about $88,000?
Snow: "What he said, was no increase in payroll taxes. Now that's very important...hurts employment, hurts economy..."
Wallace: "But is that just the tax rate, or is that no increase in the income cap?"
Snow: "Well, we don't have a detailed plan yet, but what the president said was no increase in rates."
Wallace: " Rates. So you're saying the income cap could conceivably be raised."
Snow: "Well, I'm not saying it would be...we don't have a plan yet."
Wallace: "But you're not saying it wouldn't be."
Snow: "Well, I'm saying what the president said, there'll be no increase in payroll taxes...as such."
Wallace: "Which you understand as tax rates."
Snow: "Well, as I say, that's what the president said. All I can do is repeat the president on that."
Wallace: "So, there is some ambiguity on that."
Snow: "Well, the president said no increase in rates, that's what he said and that's where we are. We don't have a detailed plan yet. We will at some point."

In the next few minutes, when asked about the financing of the transition costs should this RISKy plan be put into place, Snow reiterated three more times that "we don't have a plan". He said "If we get a real fix here - we HAVE to get a real fix - if there's a real fix we'll be able to finance the transition costs (Ack! More debt!) ...Wall Street will applaud real leadership from Washington in solving the Social Security problem. They know it hangs over the balance sheets of the United States." Somehow, even taking on this additional debt ($850 billion? $1.5 trillion? $2 trillion?) he tells us the president is committed to halving the deficit in the next two years. Comment: Bring it on! And then please come to my house and work some of that magic here.

Wallace asked if the "drastic" ideas about tax reform, such as a national sales tax and/or a flat income tax, were now on the back burner (Unspoken: because the election is over and it was all campaign claptrap). Snow said No,a panel of experts may be appointed soon to analyze and consider such proposals and make recommendations, as soon as next year. Watch out, they are on a rampage of reform!

I will keep an eye on the FOX website for the transcript and link to it when it is updated.

Comment: Overall it was a good interview by Chris Wallace. John Snow strikes me as another b.s.-er who is by far not the brightest or most qualified for the job, which of course begs the question WHY does he have it?