THERE'S NO THERE THERE:

Bush: Social Security has bleak future (DEB RIECHMANN, April 5, 2005, Associated Press)

President Bush sought to dramatize Social Security's solvency problems Tuesday by pointing to government IOUs - stored in a file cabinet - that are supposed to finance America's future retirement needs.

"A lot of people in America think there is a trust - that we take your money in payroll taxes and then we hold it for you and then when you retire, we give it back to you," Bush said in a speech at the University of West Virginia at Parkersburg.

"But that's not the way it works," Bush said. "There is no trust 'fund' - just IOUs that I saw firsthand," Bush said.

Earlier, Susan Chapman of the Office of Public Debt Accounting had shown Bush an ivory four-drawer filing cabinet with numeric locks. "This is it," she said.

"This is what exists," Bush said, illustrating his point that the promise of future Social Security benefits are simply stashed in a file.

Chapman opened the second drawer and pulled out a white notebook filled with pseudo Treasury securities - pieces of paper that offer physical evidence of $1.7 trillion in treasury bonds that make up the trust fund.

The pieces of paper he saw are not real Treasury securities. In today's computer age, investors no longer get honest-to-goodness Treasury bonds they can hold in their hands. But, by law, the bureau creates paper bonds to put in the file cabinet just in case anybody, like Bush, wants to see the trust fund.

"Imagine," Bush said in his speech. "The retirement security for future generations is sitting in a filing cabinet. It's time to strengthen and modernize Social Security for future generations with growing assets that you can control that you call your own - assets that the government can't take away."

President Participates in Social Security Conversation in West Virginia (George W. Bush, 4/05/05, West Virginia University at Parkersburg, Parkersburg, West Virginia)

I have just come from the Bureau of Public Debt. I want to thank Van Zeck, Keith Rake, and Susan Chapman. Susan was the tour guide there at the Bureau of Public Debt. I went there because I'm trying to make a point about the Social Security trust. You see, a lot of people in America think there's a trust, in this sense -- that we take your money through payroll taxes and then we hold it for you, and then when you retire, we give it back to you. But that's not the way it works.

There is no "trust fund," just IOUs that I saw firsthand, that future generations will pay -- will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs.

The office here in Parkersburg stores those IOUs. They're stacked in a filing cabinet. Imagine -- the retirement security for future generations is sitting in a filing cabinet. It's time to strengthen and modernize Social Security for future generations with growing assets that you can control, that you call your own -- assets that the government cannot take away.

This is how he should have begun the debate and on national television with the file cabinet.

Posted by Orrin Judd at April 5, 2005 3:47 PM