Senator Ben Nighthorse Campbell Clear as Mud on Social Security Reform

The Colorado Freedom Report:  A libertarian journal of politics and culture.

The Colorado Freedom Report--www.FreeColorado.com

Senator Ben Nighthorse Campbell Clear as Mud on Social Security Reform

by Ari Armstrong, May 1999

I sent US Senator Ben Nighthorse Campbell (a Colorado Republican) a signed copy of my Call for Congress to Phase-Out Social Security. The non-responsive and vague letter I got back from Campbell's office prompted me to call for clarification. The only thing clear is that Campbell doesn't have a coherent position on the issue.

What happens when you send a letter to your federal representative? First, an intern or low-level staffer opens the mail and sorts it by category. Then another staffer types your address into a database and issues you a stock form letter on the subject. Chances are, nobody who makes policy decisions in the office ever even looks at the letter. The Senator or Congressperson certainly won't read it.

On some issues, the representative might track the numbers of letters and calls received. Sometimes public opinion holds sway with the representative, so an individual letter can make an infinitesimal difference in the official's behavior. The problem with tracking is that it's only useful for issues which can be nicely categorized into pro and con. My letter on Social Security offered substantive information, so it was of course ignored completely.

The problem with sending out replies is that the representative can't be bothered with actually reading the letters, and yet he or she must stay on good terms with voters. And so Congressional offices hum along with staff dedicated to sending off neutral, non-specific replies to those who write in.

And some call this "government by the people."

The initials at the bottom of my letter were "vo," which I discovered belong to Vivian Otteman in Campbell's D.C. office. So I called Otteman to discuss the letter, hoping that its author would be able to explain it.

Otteman is what is called a "Legislative Correspondent" -- she writes form letters to constituents about a range of issues. Above Otteman is Page Faulk, the "Legislative Aid," who actually helps make policy decisions for Campbell. Another staffer, whom Otteman claims is the office expert on Social Security, is Lauren Preler. Even though I spoke only with Otteman, she's supposed to keep up with other staffers' work on the issue. As she was not able to specify Campbell's position on Social Security, I can only assume that he does not have one. (When I suggested to Otteman that her letter was not responsive to mine, she asked me if I could fax a copy of my letter over to her, clearly indicating that she'd never actually looked at it in the first place. In all likelihood the form letter I received had been written before I even sent in my letter.)

But of course I am concerned with substantive reform. According to the letter Otteman sent on Campbell's behalf, the senator has thought about a few of the peripheral issues. In particular, Campbell wants to stop using the current surplus in the Social Security system to subsidize the general budget and he doesn't want the federal government to directly invest Social Security funds in the stock market. As Otteman puts it for Campbell:

The future financial condition of Social Security is a major concern of mine. I have consistently supported legislative efforts to protect the fund from other uses, cosponsoring and voting for measures to separate the fund from the rest of the federal budget and prohibit its use to finance deficit spending. The recent Budget Resolution passed by the Senate provides that any surpluses be used to reduce the federal debt and preserve the Social Security system.

This sounds nice, but it means nothing. Nobody's worried about the fate of the system for the next couple of decades, during which time Social Security will continue to run a surplus. The big problems hit after that, when the Baby Boomers retire en masse. Within a few decades, the tax necessary to fund the system is projected to double or triple from the current level of about 15%. Obviously, this will devastate the economy. The current surplus is small and insignificant to the future of the system. But of course Campbell won't be around in politics by the time the big crunch comes, so he can afford to make short-sighted pronouncements and ignore the substantive issues. Campbell (Otteman) continues:

The Advisory Committee on Social Security reported three very different plans for overhauling the program. While the proposals certainly merit consideration, there are also concerns that privatization abandons the current nature of the system which protects low protecting low-income workers [sic], survivors and the disabled. In addition, privatization of such an immense system could potentially distort the capital system, lending it to intense political pressure. Should a worker's retirement be entirely built on government guarantees or the economy's health?

I would favor a plan which maintains the mission of the Social Security System by coupling the secure investments of the current system with the rates of return from private investment that would ensure the solvency of the system for future generations.

Say what?

So does Campbell or doesn't he want to convert some or all of the Social Security system into mandatory, regulated accounts? He does, according to Otteman. What he disfavors is letting the federal government directly invest Social Security funds in the stock market. However, he supports converting a "portion" of the system into mandatory, regulated accounts. This position is highly problematic. First, individual investment accounts will still be subject to federal regulation, so the politicization of the capital market is inevitable.

Second, mandatory, regulated accounts are barely less onerous than the current Social Security system. That money belongs to the individuals who earn it, not to the government. The only way some of the Social Security funds could be converted to mandatory, regulated accounts is if somebody gets stiffed out of some of their promised benefits. Think about it -- the system is a pure wealth transfer scheme, so "permitting" workers to put that money into an investment program necessarily reduces the amount of funds available to pay off promised benefits. If the government is going to reduce benefits, then it should simply lower the Social Security tax, not replace it with a system of mandatory, regulated accounts.

However, Campbell hasn't really made up his mind. "The debate is just starting on the Hill," said Otteman, and Campbell is waiting for President Clinton to propose some sort of reform to start the debate. Why anyone would want to wait on Clinton to initiate a policy is unclear.

Of course, I propose that the government PHASE-OUT the Social Security system altogether. I fear the proposal I favor is much too simple, and would give individuals too much freedom, to ever be considered seriously at the Capitol. The tax could be completely phased out if the age at which benefits are paid out were increased by three or four months every year, indefinitely.

Otteman raised the issue of the poor who depend on Social Security. In fact, most of the tax is welfare for the rich. If Senator Campbell wished to protect the poor, he would call for converting the Social Security system into a means-tested welfare program for use only by the poor. Instead, Campbell wants to somehow "preserve" the entire tax.

Otteman's rhetorical question, "Should a worker's retirement be entirely built on government guarantees or the economy's health?," is a false dichotomy. Workers' retirements should be built on their own savings, supplemented by charity from family and private organizations if necessary. It is massive government interference in the economy which weakened the economy in the first place, making it more difficult for everyone to save adequately for retirement.

Finally, I asked Otteman what she meant by saying Campbell wants to "maintain the mission of the Social Security System." What is this "mission?" The only mission the system has ever had was to push the elderly out of the work force during the Great Depression, and that mission is hardly at issue today. Otteman replied that Social Security "establishes a system of savings." But as I noted to her, not a single cent collected by the tax has ever been "saved" -- all the money is transferred directly to others. Indeed, the Social Security tax diverts money from investment to consumption, thus reducing the national savings rate and slowing the growth of the economy.

What Otteman must have meant, then, is that the mission of Social Security is to transfer money from the young to the elderly.

That's the mission Senator Campbell is so eager to support? What ever happened to the mission of establishing liberty and economic freedom?

Editor's note: Both Otteman and Preler were invited to reply to this article, for publication. Neither did so.

Read the Call for Congress to PHASE-OUT Social Security!

The Colorado Freedom Report--www.FreeColorado.com