shenanigans-1

Vice President Cheney [Catholic University, 1/13/05]

Cheney: Another argument against Social Security reform with voluntary personal accounts is that the so-called transition costs would be too high. Yet focusing merely on transition costs is to overlook the greater cost of doing nothing. Again, the projected shortfall in Social Security exceeds $10 trillion; that figure is nearly twice the combined wages and salaries of every single working American last year. There will be no -- there will be costs no matter what we decide"

Note he is comparing the costs projected for 75 years in the future to wages and salaries from last year. On an apples-for-apples basis the Social Securities Trustees said "in the 2004 report issued last March, the Trustees updated those figures to a $10.4 trillion deficit and a $295.5 trillion taxable payroll." That is it will be a 3.55% shortfall in revenue versus expenses. Under the current formula that could be made up then with a 1.77% increase in the social security tax to both employee and business. If the increase in the FICA is done in 2006, the increase to FICA is 1.33%/2=0.66%. Neither increase constitutes a crisis.

Dick Cheney [Fox News Sunday 2/6/05], "We're going to borrow $758 [b]illion over the next 10 years to set up the personal retirement accounts. We think that's a manageable amount ... Trillions more after that."

Chris Wallace, "Isn't that misleading? Because under your plan, the accounts, the program wouldn't actually start til 2009. So, if you take the first full 10 years, when people can actually invest in the program, the cost is over $1 trillion, and for the following 10 years, it's $3.5 trillion. Isn't it a lot more expensive?"

Especially when the private accounts don't solve the underlying problem of funding Social Security with fewer workers.