Remember Al Gore's Lock Box? Well, It's Baaa-ack!!
Reported by Marie Therese - October 17, 2007 -
When Al Gore was running for President in 2000, one of the linchpins of his campaign was that he would take the entitlement trust funds and put them in a "lock box," thus preventing Congress from raiding the funds to pay for its pet projects at the expense of future generations. He was routinely ridiculed by the vast right wing noise machine for this idea. With his defeat, the idea of protecting the trust fund went out the window and as we all know, the Republican Congress treated it like a free lunch, eating away at our future in order to avoid raising taxes on the wealthy. Well, now that the damage has been done and the piper has to be paid, click here to see who's rediscovered the "lock box" just in time to make it an issue for the Democrats?
Jim Angle, FOX News' chief Washington correspondent (and the man in the click-through picture above), gave a report on Monday, October 15, 2007, on Special Report that listed all the reasons Al Gore gave in 2000 about the why we needed a "lock box." Gore foresaw the problem and had committed himself to stopping the practicing of borrowing from the trust fund. For this he paid a price by being vilified and derided by the conservative media.
In the past six years, the war in Iraq, a Republican Congress that reduced taxes on the wealthy while dispensing largesse like a drunken sailor and a President who never vetoed a spending bill have bankrupted social security (as Jim Angle admits above). That will leave it to the Democrats to clean up the mess and the baby boomers to pay the price in lowered benefits, a longer wait for their checks and higher taxes for everyone - except the very rich who will move to Dubai so they can't be taxed.
The video of Angle's "lock box" lecture was available for a short time on FOXNews.com, but now seems to be gone. However, I did find the transcript of the segment - and as an added bonus, links to some of the right wing's foaming-at-the-mouth rhetoric about the Gore "lock box" plan. They make sad reading, as it brings home very strongly just how right he was.
TRANSCRIPT, SOCIAL SECURITY SEGMENT, SPECIAL REPORT, OCTOBER 15, 2007
BRIT HUME, FOX NEWS ANCHOR: ... Welcome to Washington. I'm Brit Hume. The days of reckoning have begun. The first of the Baby Boom generation filed today for early government retirement benefits. And a tsunami of such filings is on the way for years to come. And will those be days of reckoning? We will let Baby Boomer and chief Washington correspondent Jim Angle explain.
JIM ANGLE, FOX NEWS CHIEF WASHINGTON CORRESPONDENT (voice-over): It's a big day for Kathleen Casey-Kirschling, who was born one second after midnight in January, 1946. She filed online today in front of cameras for early retirement benefits from Social Security, becoming the very first Baby Boomer to sign up.
KATHLEEN CASEY-KIRSCHLING, BABY BOOMER: I am one of many millions and blessed to have been in this generation and really blessed to be able to take my Social Security now.
ANGLE: Good news for Kathy, but not for Social Security, because she is the first of many more to come, more, in fact, than Social Security can pay for.
DAVID WALKER, GAO COMPTROLLER GENERAL: There are approximately 77 million boomers and that gets your attention right off.
TIM PENNY, UNIV OF MN: We're going to have tens of thousands of Baby Boomers retiring every week over the next decade or so. That means that by the time we get to 2017, just 10 years away, we will no longer be collecting enough payroll taxes to pay Social Security benefits.
ANGLE: The expected shortfall in 2017 is exactly what the Social Security trust fund was supposed to cover, but that money, the taxes taken out of every paycheck, is gone.
(on camera): When Social Security gets your payroll taxes, it pays out most of the money in the form of benefits. What is left over is supposed to go into the Social Security trust fund. But instead, the government pockets that money and spend it on other government programs. It puts IOUs in the form of government bonds into the trust fund. So when Social Security needs the money, it will turn to the government and say, pay up.
(voice-over): There's only one little problem: the government has to get that money from you.
PENNY: This money has been borrowed. It has been spent and there is no easy way to put it back.
ANGLE: Meaning either raising taxes or cutting benefits, delaying retirement, or some combination. Or cut federal spending on everything from defense to education to national parks.
PENNY: The list of programs we would have to get rid of to free up enough money to pay back the Social Security trust fund gets larger and larger. And the list never gets smaller and it never goes away.
ANGLE: And every year that lawmakers try to avoid the tough decision, the overall tab gets bigger.
WALKER: Because by waiting a year to reform Social Security, it adds about 600 billion dollars in additional costs that we are going to have to come to grips with over time.
ANGLE: The problem is already huge. The federal government owes the Social Security trust fund two trillion dollars. And it will need another four trillion dollars to pay all the benefits that have been promised. Analysts say those nearing retirement are the least likely to suffer. It is younger tax payers who are the most likely to get whacked with higher taxes.
In Washington, Jim Angle, Fox News.
HUME: Oh, happy day.
SOME CHOICE COMMENTS ON "THE LOCK BOX" 2000-2001
The Heritage Foundation
"Lock Box" Schemes Will Not Solve Medicare's Real Financial Problems
by Peter Sperry and Robert E. Moffit, Ph.D.
July 31, 2000
Taxpayers should always beware of accounting gimmicks that would merely move funds from one federal budget account to another while claiming to reserve tax dollars for a specific purpose. This is especially true when it comes to Medicare, the financially troubled health care program that covers approximately 40 million senior citizens and disabled Americans. Some in Congress have joined President Bill Clinton and Vice President Al Gore in promoting as a remedy for Medicare's problems the establishment of a "lock box," whereby surplus tax dollars would be set aside in a safe place to accrue interest and be used for Medicare expenditures in the future. Taxpayers should indeed be wary.
To be sure, this approach is politically attractive; it connotes security and fiscal conservatism. At best, it indicates Washington's good intentions. But at worst, the lock box proposals rely on an accounting gimmick that could lure taxpayers into believing that this approach somehow will fix Medicare's problems. Neither the Administration's proposed lock box mechanism nor the congressional approach would substantially improve Medicare's financial condition; one might even make the situation worse for beneficiaries. Regardless of what the phrase "lock box" implies, there is no sure way to keep future Congresses from "picking the lock" to spend that money on other federal priorities.
Enter Stage Right
Al Gore's biggest swindle
By Joe Schembrie
October 16, 2000
The difference between 'investing' your money in Social Security and investing your money privately is the difference between a retirement spent collecting empty soda cans and a retirement spent collecting frequent flyer miles.
(NOTE: Unlike a private investment fund, Social Security disbursements are controlled by a maze of regulations -- so individual numbers will vary. But since a private fund is a real investment and Social Security is only a government accounting trick masquerading as an investment, the fact remains that cash flow is MUCH higher for a private fund.)
Is seven percent a 'risky scheme' interest rate? No, it's lower than the stock market's rate of growth over the past decade. It's much lower than the eleven percent real rate of return that people in Chile are said to be enjoying under their privatized equivalent of Social Security.
Besides, if the economy tanks, the government won't be able to afford our current Social Security system, either. Indeed, isn't it having enough trouble funding Social Security right now, during the biggest economic boom in history? It would seem that, no matter how rich or poor you are, a bad investment is never a good idea!
Unfortunately, the government of today -- and of Al Gore tomorrow, if he gets elected President -- will force you to 'invest' in Social Security. It will be the working poor, who do not have private pension benefits and cannot afford personal investments, who will get hurt the most by being deprived of an alternative investment opportunity.
Al Gore, who proudly proclaims, "I will put Social Security in a lock box," may as well say, "I will steal hundreds of thousands of dollars in lost investment income from every working person in America -- even the poorest -- and leave them destitute in old age."
George W. Bush wants to privatize just two percent of Social Security taxes. But obviously, his 'hidden agenda' is that once people see how fast that investment is growing, they'll want to switch to a hundred percent privatized system -- and retire rich.
If liberal Democrats truly were compassionate, they would hail Bush's plan as a great experiment -- little to risk, much to gain. But instead, they're portraying it as an evil plot to loot the American public.
Memo on the Margin
Jude Wanniski WND
Al Gore's lock box
Posted: November 1, 2000
1:00 a.m. Eastern
To: Bob Shrum, Gore campaign strategist
From: Jude Wanniski
Re: Weeping and Gnashing of Teeth
Vice President Al Gore is being advised, I see, to spend the last week of his campaign scaring the electorate about George W. Bush's "risky scheme" by which he would take part of the projected budget surplus and give it back to the taxpayers so they can invest it on their own behalf.
The Vice President says he instead would put that money in a "lock box," taking it out years from now when it is needed. There are of course a great many people who are afraid of risk-taking and perhaps there will be enough of them on Nov. 7 to elect him president. I've always doubted that Gore could be elected to the top office, though, because I believe the electorate knows deep down that all growth is the result of risk-taking. The only way the nation advances is by encouraging as much risk-taking as possible, even though there is much more failure than success. The small number who succeed, by producing a better widget or software, make life easier for the general population. It has always been so."
August 26, 2001 -- Fox News Sunday. Instead of just repeating the "lock box" mantra to [Larry] Lindsey, Fox’s Brit Hume explained its phoniness to him: "We keep hearing that the Social Security surplus may be invaded, which is to say that these payroll tax revenues that come in, which are estimated to be in excess of what’s necessary to pay benefits by somewhere between $155 and $160 billion this year, will not be touched, that they’re in a quote, ‘lock box,’ unquote. In fact though, sir, isn’t it the case that the money will be very much touched and it will be loaned back to the government. Social Security will get IOUs or government securities and what will happen is the money will be used to pay down other government debt, correct?"
Lindsey: "That’s correct..."
Wow! There you have it, in a nutshell. Larry Lindsey, who was Director of the Economic Council and Assistant to the President on Economic Policy during the first years of George Bush's administration, played a leading role in formulating Bush's tax cut plan. It's obvious from this FOX News Sunday interview in 2001 that Lindsey was signaling that the tax cuts would be funded in part by continuing to allow Congress to raid the Social Security Trust Fund.