Friday, July 29, 2005

Fiscal language watch

Senator Jim DeMint, sponsor of the Senate bill that would divert annual Social Security operating surpluses into newly created private accounts, is quoted in this week's Tax Notes Magazine as saying that Congress should act on his bill first. Then, once the annual surpluses have thus been "saved," there will be plenty of time to worry about long-term solvency.

This is certainly an interesting use of the word "saved." He proposes to create new benefits, apparently without any financing whatsoever until participants' traditional benefits are ostensibly cut back later on to pay back the implicit loans, and thinks or at least says that money is thereby being "saved."

If the plan passed, Congress would no longer be "spending" the Social Security surplus. True, so far as we can tell it would be spending just as much as previously, and borrowing to replace the diverted funds. But at least it wouldn't be spending those very dollars. It would instead be spending other dollars with different serial numbers printed on the front.

I have an even better idea. Congress could "save" the Social Security surplus by giving it to me. I promise to make good use of it.

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