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June 30, 2006

McGavick on Social Security

Posted by David Postman at 10:01 AM

Mike McGavick's position on Social Security has become the issue, or really the question, of the week. Getting an answer has even become a contest on one of the most popular political blogs in the country.

I can understand some of the curiosity because McGavick's campaign material doesn't say much about his position. On his Web site he says there should a system that allows people to give back Social Security money they don't need.

But I just finished a lengthy interview with McGavick about Social Security and he has a much more expansive platform. Here's his main three points.

1. He supports means testing, voluntarily at first but if people don't turn back enough money he'd support making it mandatory and creating income limits for benefits.

2. Benefit levels must be guaranteed for people at or near retirement age.

3. He wants a phased-in system of individually controlled, privately managed retirement accounts that could provide a higher yield than the government-run system, but would come with a lower guaranteed payment.

Does this mean he supports what President Bush proposed last year?

"I do not think the president's program was that well designed or that well promoted. But I think something like this with some hard bipartisan work could create a lasting solution for a problem that has cyclically dogged us for decades."

Here are some details. On means testing, McGavick said that each year Social Security recipients would be given the chance to send money "back into the trust to extend the life of Social Security for the good of society." He said it should be promoted as a "patriotic endeavor." But if people weren't willing to give back benefits, he'd support mandatory means testing.

McGavick said that would save money at the front end of the transition to individual accounts. Bush, he said, "didn't do anything at the front-end to shrink the problem."

McGavick said he knows that people will refer to his talk of personally controlled accounts as privatization. He said financial institutions would be involved, but would not control, the investments. "I'm not turning it over to banks to run. I'm turning it over to the individuals for them to run." The accounts would be similar to 401 K programs, with investment choices "that could provide a higher yield than the current Social Security investment strategy." But with individual control would come a lower guaranteed benefit.

McGavick says partisanship has made it impossible to fix Social Security. He said it may take a bipartisan commission with a proposal given to Congress for an up or down vote to get anything done. He said he'd support anything "to get this out of the political world and into a thoughtful space."

President Bush said this week he's going to keep trying to change Social Security. But McGavick says he doubts anything will happen until after the next presidential election.

"I don't think there's enough juice left in this administration to push that through. That's just my own opinion."

You can credit Josh Marshall for the pressure to get answers about McGavick's Social Security position. He has decided to "start tracking some positions here on Social Security", and several of his loyal readers have e-mailed me in the past two days asking me to follow up.

The Democratic Party has also been pushing this angle since last week's D.C. fundraiser with the Financial Services Roundtable.

This is the part that seems to bug McGavick. He says it's insulting to suggest that because the roundtable held a fundraiser for him, and those firms supported the president's plan, that he would follow in lock step.

So what about Maria Cantwell's position? I'll be asking for more details, but here's what she says on her campaign Web site:

Maria opposes Social Security privatization because she believes this critical program must serve its original purpose as a safety net for seniors. Her innovative legislation, the Consumer Price Index for Elderly Consumers Act, would base Social Security cost of living increases on a more realistic assessment of how much elderly Americans need to get by each month. By taking into account the rising cost of health care and its unique impact on seniors, Maria's plan would make a real difference for retirees.

UPDATE:

Joshua Micah Marshall seems less than impressed with McGavick's answers. (But do I get a mug?) Marshall wrote, "For now, McGavick seems like he just wants the issue to go away." I'm sure, but McGavick answered all the questions I had and I'm confident he'll put up with the inevitable follow-ups. Isn't anyone impressed with McGavick's line that there isn't "enough juice left in this administration to push" Social Security through?

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