PLANT THE ACORN NOW AND GROW IT INTO AN OAK:

Back the 'Grow Accounts,' Mr. President (Donald Lambro, Aug 22, 2005, Human Events)

Contrary to the belief that President Bush's investment accounts plan is dead, one half of his reform proposal is alive and kicking in the House -- the far less controversial part. The so-called "grow accounts" bond investment bill has the full support of House Republican leaders, including Speaker Dennis Hastert (R-Ill.) and Majority Leader Tom DeLay (R-Texas), who is pushing for an early vote.

The only thing that's missing right now is Bush's support. The White House has been cool to the idea, but conservative strategists say the bill would "pass the House in a heartbeat" with the president's backing. While its prospects remain uncertain in the Senate, a roll call vote on its merits would put Bush back onto the offensive on one of his toughest issues, throw the Democrats into a thorny political situation, and, if it fails, give Republicans a great issue to run on in 2006.

"Grow accounts take Republicans out of the weeds on Social Security," said Larry Hunter, vice president and chief economist of the Free Enterprise Fund, which advises Republicans on economic issues. [...]

The Republican plan, sponsored by Ways and Means Social Security subcommittee chairman Jim McCrery of Louisiana, would allow workers to invest some portion of their payroll taxes in such bonds, backed by the full faith and credit of the U.S. government. Here's how it would work:

The Social Security payroll tax system takes in billions of dollars more than is needed to pay out monthly retirement checks. The government takes this huge cash surplus and uses it as general revenue to pay its other bills. In return, the feds give the Social Security's so called "trust fund" Treasury bonds that promise to pay back the borrowed money in future years.

Under the grow accounts proposal, workers who sign up would own a share of these bonds and the interest payments that would accrue from them over their working years. Instead of having nothing but promises that they will get their future benefits, they would own secure, tangible assets that no one could take away from them when they are ready to retire, and which could be left to their heirs.

"It's a very positive first step," said Social Security analyst David John at the Heritage Foundation. "The way the accounts are structured, there's no risk. You would own the bonds. It would be your money and could not be spent on highways or other things."

Just create accounts of any kind and you're on your way.

Posted by Orrin Judd at August 23, 2005 10:06 AM