Yikes, it seems that Bush’s new topic economic advisor, Ben Bernanke just put a spike in the House Republican plan to privatize Social Security. That plan had abandoned all pretense that the program was in “crisis,” and decided instead to just borrow billions and billions of dollars to fund “temporary” private accounts. Candy for everyone, it was, and an outright disaster too. But now, barring a House revolt against the White House—and Rep. Paul Ryan (R-WI) did respond to Bernanke by saying, “I don’t think the White House is drawing any lines in the sand, these comments notwithstanding”—that plan is dead.
Anyway, it’s certainly very responsible of Bernanke not to squander his professional reputation over a crazy House plan, although he still seems to be committed to Bush’s privatization idea—namely, steep benefit cuts, bigger deficits, and exposing pensions to increased risk. At the same time, that’s also the plan least likely to pass: so long as White House officials pretend that the program is in crisis, and so long as they maintain that that crisis actually needs to be fixed, and so long as they refuse to raise taxes, then benefit cuts will become very necessary, which, as we’ve seen, are the most unpopular part of this whole fiasco. Meanwhile, it seems the Senate can’t get anything moving on this either.