Social Security and Enron Accounting

On the substance, Deroy Murdock makes two points that I wish his National Review colleagues will notice. First, he includes interest income in his definition of the Social Security surplus:

In fiscal year 2005, for instance, the Social Security system will collect $496.7 billion in payroll taxes, $14 billion in taxation of benefits, and $83.6 billion in congressionally appropriated interest. Of this $594.3 billion bundle, seniors will receive $433.7 in benefits, while $6.5 billion will cover administrative costs. This $154.1 billion balance is the Social Security surplus.

He later notes that counting this surplus as an offset to General Fund deficits is Enron accounting:

These pieces of paper obligate future Congresses to collect taxes tomorrow to finance Congress’ bipartisan spendaholism today. There are no underlying, marketable assets involved – just the anticipated political will of future elected officials to shake down citizens who currently populate America’s K-12 classrooms. This is legalized Enron accounting. DeMint, Ryan, and their co-sponsors would end this spectacular fraud.

Yet as he appropriately calls Bush’s fiscal fiasco (without naming Bush somehow) Enron accounting, he has already engaged in what has to be seen as political absurdity. The DeMint proposal does nothing to reduce the General Fund deficit. Mr. Murdock opens his oped with:

Republicans are making them an offer they may be unable to refuse: Help the GOP stop raiding the Social Security Trust Fund, or vote to continue Uncle Sam’s biggest swindle.

Did I miss the news last night? Did John Kerry and Bill Frist switch parties? Did Bill Thomas and Charles Rangel switch parties? Have Howard Dean and Ken Mehlman traded positions? Mr. Murdock might wish to check the consensus between Mark Thoma and Kevin Hassett that Clinton’s fiscal policy was more responsible than the Enron fiscal policies coming from the current Administration.

If Mr. Murdock chooses to read what Kevin Hassett wrote, he might take delight in Hassett’s claim that Bush’s fiscal fiasco is due to too much spending and not due to a reduction in tax revenues. But take note that Hassett’s claim is pure spin.

Update: Mark Thoma also reviews Murdock’s oped. Check out the links in Mark’s post for further explanation as to why the DeMint proposal does virtually nothing to address any alleged solvency problem.