Gore Misfires on Social Security

Vice President Al Gore proposes to boost the Social Security pensions of parents who stayed home with their children and to increase the benefits of widows and widowers. He calls this plan “new reforms to modernize Social Security and strengthen it for the future.” Actually, it’s election-year pandering that would hasten the insolvency of the Social Security trust fund.

Like so many politically driven proposals, this one has a grain of merit. Including child-rearing years in one’s employment total for Social Security purposes would encourage parents to stay at home with their children. But those likely to benefit most would be well-off parents.

Single mothers or those with a family income so low they could not afford to stay at home would not benefit. The proposal would be expensive and, applied retroactively as Gore proposes, would create a bureaucratic nightmare. It would also raise justifiable demands for similar benefits for those who stayed at home to care for ailing family members.

Increasing benefits for widows would address financial problems that women, who statistically outlive men by seven years, often face under the current system. But this too would come with a huge price tag. The two proposals would cost at least $100 billion over the next 10 years.

The Social Security fund, according to the latest estimates, will run out of money by 2037 unless something is done to replenish it. Even a minor fix today would yield huge returns in three decades. It is important to make small cost-saving adjustments today, rather than wait for painful ones later. Among the proposals worthy of consideration is partial market investment of the fund to increase returns, another increase in the retirement age to account for retirees’ longer life expectancy and, if necessary, bigger increases in the payroll tax.

Gore is highly critical of George W. Bush’s plan that proposes some of these changes, claiming that accompanying tax cuts called for by his presumed presidential campaign rival would eventually bankrupt the fund. But what Gore is proposing is no reform at all. Rather, his plan to strengthen the pension fund would in fact weaken it by adding new obligations and endangering long-term solvency.

Making overblown promises is a time-honored tradition of campaign politics. But proposing major new spending and calling it reform ill-serves what is potentially one of the country’s biggest long-term crises.