Molly Ivins July 26

AUSTIN, Texas — I'm afraid Karl Rove's timing is off: You can't pass a huge tax cut tilted heavily toward the rich and then announce Social Security is about to go belly-up. People make the connection.

If only he'd waited 'til next year — the Washington press corps can't remember anything longer than six months. But Rove has cut it too fine this time: — people are just now getting their rebate checks and hearing that Social Security is a disaster area at the same time. Furthermore, the peppy idea of putting Social Security money into the stock market doesn't look all that good since the market has lost about $3 trillion in the current downtown. Pfffft! Hey, let's put our retirement money into that sucker and watch it shrink!

The Bush commission has the singular distinction of being comprised entirely of people who already agreed with George W. Bush that Social Security needs to be privatized. Let me count the ways this is a truly bad idea.

One (and this is the leading reason for proposing this daft notion in the first place), it will take a huge amount of money out of Social Security and put it into Wall Street brokerage firms. You know how brokers work: They make money when you buy, and they make money when you sell. A no-lose proposition for them. Literally billions in commissions await them, and that's the lobby that's pushing the privatization scheme.

Social Security happens to be run at a miniscule administrative cost (yes, government does do some things right). If we break off some of the money into private accounts, administrative costs and brokerage fees will eat more of our money.

Second, you know perfectly well a lot of people will get ripped off if they control their own retirement money. Older people are particularly vulnerable to con artists —- it'll be a gold mine for gold mines, diamond finds and every other cockamamie, pie-in-the-sky scheme that's ever come along. Think only the feeble-minded will lose? Who lost money in high tech? Wasn't it all those brilliant young hotshots we kept hearing about? Wasn't it the NASDAQ that went down 60 percent?

Then there is the unhappy set of matching numbers to be considered. The Bush tax cut (35 percent to the richest 1 percent of the people) will eventually cost about $170 billion in annual revenues.

The estimated SS shortfall by 2038 comes to $180 billion. Maybe if you invest your $300 rebate (setting aside the 28 percent of you who aren't getting any money and the other 12 percent who will get less than $300) in the stock market, you'll be able to retire in a few years. But don't count on it.

You will hear more lies, damn lies and statistics about the state of Social Security in the coming months and years than even Mark Twin could have dreamed of. The Social Security trustees, on whose numbers the Bush commission relied, are using an exceedingly grim forecast. Nevertheless, it makes more sense to use those forecasts than to use Rosy Scenario and assume there's nothing we need to do about it.

According to the experts at the Center on Budget and Policy Priorities, and everybody else, we do have real, long-term problems with Social Security that need to be addressed now, but we are nowhere near a crisis — and the crunch is further out than the Bush commission says. Republicans have traditionally accused Democrats of fear-mongering on Social Security. Unfortunately, the Republicans have now taken it up.

The most unfortunate thing about the commission report is not just that it's misleading, but that it further polarizes a debate that will have to be solved by both parties. The commission announces doom in 2016, because that's when the line of payroll tax receipts crosses SS outgo, but they are not counting interest from the enormous SS surplus, which should be by then $5 trillion. As Alan Blinder, former vice chair at the Federal Reserve, said cheerfully Wednesday, "That's not chopped liver."

Henry Aaron, author of an excellent book on Social Security and a senior fellow at Brookings Institute, says our situation is like that of a family saving for the college education of the kids. That education may well cost more than the family's current income, but the two things you do about it are to pay down the mortgage (the national debt) and increase your savings. So by the time the kids get to college, you're in financial shape to afford it.

Ken Apfel, former SS commissioner, says the good news politically is that Congress is now treating Social Security as a separate entity, rather than as part of the total federal budget. (Who said "lockbox"?) But the Bush tax cut is so large it may tempt Congress into using the Social Security surplus to finance government operations, and then we would be in the soup.

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