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Thursday, January 29, 1998

President's Numbers Don't Compute

By Howard Hobbs, Daily Republican Contributing Editor

WASHINGTON DESK - President Clinton made a number of promising statements about rescuing Social Security in his annual message to the nation this week. Characteristically, president Clinton offered nothing that would actually accomplish any rescue operation.

A great number of significant delays in addressing Social Security reform have resulted from president Clinton's appointment of commissions to study alternatives that lead nowhere. Now, Clinton's new call for further study actually postpones any serious action during the remainder of his administration.

In typical Clinton-speak the president proposed devoting any budget surpluses to saving Social Security from bankruptcy. 'What should we do with this projected surplus? I have a simple four-word answer: Save Social Security first.'

That statement left economists and government budget analysts in the dark. Why? The truth that president Clinton is concealing is this: if the government were not currently spending Social Security money on other programs, there would be no projected budget surplus. Its function is to pay out future Social Security benefits. The appearance of a present surplus is only an accounting practice used to distract us.

Misleading the American people, the White House announced Tuesday that these surpluses could reach $200 billion over the next five years.

This picture comes into focus, however, when you remove Social Security revenue from the president Clinton's calculus. When you do that, those surpluses that president Clinton takes credit for disappear. Then, the real state-of- the-nation is spelled-out in red ink. Making matters worse for the president's case, in the year 1998 alone, the amount of Social Security payroll-tax collected amounts to more than $100 billion more than it is paying out in Social Security benefits.

What president Clinton didn't tell the American people in his annual address this week is that his administration wants permission to keep on spending that surplus tax money to pay for his ideas of what a bigger and bigger government might be under his blue-smoke and mirrors version the future. Following Clinton's logic would produce the obvious consequence of a sharply under-funded Social Security retirement program.

By the year 2010, nearly 80 million Americans will retire and not be paying Social Security payroll-taxes. Instead they will be asking for their Social Security benefits. The tax funds for those benefits will be long-gone.

Benefits that Social Security owes to future beneficiaries, are estimated by economists to be the equivalent of nearly 24 months worth of the entire economic output of the United States. That sum is nearly $20 trillion, and growing.

It appears president Clinton may have given a lot more thought to the sound of the words 'Save Social Security First' and to their psychological effect on his audience than he did to a workable economic plan to achieve his pretentious objective.

Perhaps, the president was not at the 'top of his form' this week being somewhat distracted, understandably, by pressing legal matters involving multiple accusations of witness tampering, obstruction of justice, suborned perjury, and the like.

Whatever the underlying circumstances, the American People are not buying it.

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