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Privatized Social Security - Take 2

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'If you don't succeed at first, try, try again." That could well be the motto of those trying to partially privatize Social Security.

It's already clear that most Americans don't back Republican efforts to divert some Social Security revenues into private accounts. And in the Senate, Democrats have enough votes to sustain a veto of any privatizing bill.

So a group of influential Republican members of Congress last week announced a plan to use the system's current cash surplus - rather than future payroll tax revenues - to finance these accounts.

The idea has a certain political appeal. The 11 Republican senators sponsoring the new legislation bill it as "Stop the Raid on Social Security."

Here's the logic: Social Security has big surpluses. For years, Congress has "borrowed" them to make the "unified" budget deficit look smaller. Their plan, the senators note, would end that. Neither party could use the surplus to mask the true size of the deficit. Instead, it would be legally owned by workers who decide to open personal accounts.

So far, so good. However, it's far from the full story.

Take the senators' math, for example. They calculate that since 1985, Congress has spent $1.67 trillion of the Social Security surplus on other government programs. But they conveniently overlook that in return, the Social Security Trust Fund holds $1.67 trillion in federal bonds. Those bonds are already earmarked for Social Security retirement benefits down the road when there will be more retirees and proportionately fewer workers to support them.

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