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Jewish World Review Jan. 12, 2005 / 2 Shevat, 5765 A time to praise and a time to disagree By Ed Koch http://www.JewishWorldReview.com | Within the last several weeks President Bush has taken two actions with which I strongly disagree. First, he awarded former CIA director, George Tenet the Presidential Medal of Freedom, which Tenet did not deserve. Last week, The New York Times reported that "an internal investigation by the Central Intelligence Agency has concluded that officials who served at the highest levels of the agency should be held accountable for failing to allocate adequate resources to combating terrorism before the Sept. 11 attacks, according to current and former intelligence officials." Those specifically criticized were, "George J. Tenet, the former intelligence chief, and James L. Pavitt, the former deputy director of operations." One can only conclude that it was an egregious error to have awarded Tenet the medal, and to have allowed him to resign rather than firing him. Compare Tenet's award with the harsh fate of Admiral Husband Kimmel and General Walter Short, who commanded our military at Pearl Harbor on December 7, 1941. Even though the Pentagon had not warned either officer that war was imminent, both were hauled before Congress, publicly tongue lashed, demoted and sacked, sending a message that in a time of war, failure will not be tolerated. The President's second serious error within the past several weeks was his announcement that he intends "to spend political capital" to privatize Social Security, allowing diversion of one-third of the Social Security tax paid by employees, so that they can open individual investment accounts. That diversion would be financed by the U.S. government's borrowing of an estimated $2 trillion. Supporters of the President's proposal claim that stock market investments exceed the rate of return the Social Security administration now receives by investing in Treasury securities. They further argue that in no twenty-year period has the stock market suffered a net loss. The overall message trumpeted by the President is that unless drastic action is taken now, the Social Security fund will soon be unable to provide benefits to current and future Social Security beneficiaries. Indeed, last Sunday The New York Times reported that "According to Social Security actuaries, after 2042, if no changes are made to the system, Americans will get less than three quarters of what has been promised to them." Currently, there are 3.3 workers making Social Security contributions for each beneficiary receiving monthly payments. The ratio of workers to beneficiaries is declining, as baby boomers reach retirement age. Permitting individuals to have separate accounts would not save Social Security. Although workers twenty or thirty years from retirement might be inclined to open private accounts and assume the attendant risks, those already receiving Social Security payments or expecting to do so shortly are not likely to open such accounts for fear of losing their expected retirement benefits. Moreover, even partial privatization will hasten the demise of Social Security, as it will require the government to borrow extensively to make up for the massive shortfall that will be created by the diversion of $2 trillion. What should we do? The solution is not complicated, but requires courage. One option is to advance the age of retirement from the current 65 in recognition that overall longevity has increased. The retirement age has already been raised to 67 for persons born after 1960. The second option is to reduce benefits. This is the least desirable. The third option is to increase the Social Security tax rate or apply it to more income. Currently, only the first $90,000 of any individual's income is subject to Social Security tax. Realistically, all three options may need to be used in formulating a solution to the problem. Almost everyone agrees that those currently receiving benefits should not suffer a reduction and those within a few years of retiring at 65 should not have to wait additional years to qualify for retirement. Public officials, the President and members of Congress have to be honest with the public and not be afraid to do what is right out of fear of not being reelected. The issue has been joined. Two ads appeared in The New York Times this past Sunday promising to fight the President's privatization plan. One was that of AARP and the other by the Concord Coalition, the co-chairs of which are former U.S. Senators Bob Kerrey, Democrat, and Warren Rudman, Republican. Who will gain by privatization? The biggest winners will be Wall Street and the stock and bond brokers, who will ultimately earn billions in commissions. If investing in equities and bonds is really a good idea, the Social Security administration should create a means to do so, so that the entire so-called trust fund can benefit. Individuals, with their life savings hanging n the balance, should not be turned over to stock or bond brokers to be fleeced like sheep. Every weekday JewishWorldReview.com publishes what many in in Washington and the media consider "must-reading." Sign up for the daily JWR update. It's free. Just click here. JWR contributor Edward I. Koch, the former mayor of New York, can be heard on Bloomberg Radio (WBBR 1130 AM) every Sunday from 9-10 am . Comment by clicking here. Archives © 2005, Ed Koch