Steve Forbes, editor of Forbes business magazine, praised President Bush's plan to privatize Social Security in a speech at Tenley Campus, using a baseball analogy perfect for the Nationals' opening day on Monday.
"With private retirement accounts, you won't hit a home run, but you won't strike out. You'll get on base," he said.
Forbes criticized politicians on both sides of the political spectrum for failing to fix the Social Security system, asking the crowd of Washington Semester students to "forgive me if I state the obvious."
He accused the Bush administration of not having a specific and clear-cut plan for privatization. Because of the administration's failure to clearly explain its proposition to the public, retirees are afraid they will lose their benefits under the plan.
Forbes said the administration's goal of putting 4 percent of the 12 percent payroll tax from each individual worker collected into private accounts was "stingy."
"If you're going to do it, make it real from the get-go," Forbes said.
Calling the idea of a Social Security trust fund a "myth," Forbes warned that Social Security was not a contract and that the Supreme Court ruled that Congress has no obligation to pay the benefits.
He ridiculed the program as a non-funded liability, joking that in the private sector if you offered a retirement plan with no money to back it up, "[New York Attorney General] Eliot Spitzer would take you away in handcuffs."
Because this was not a trust fund, Forbes told the audience to expect the Social Security surplus to be used for a "Washington pet project."
Forbes explored several common talking points, starting with the figure that the worker-to-retiree ratio has gone from 16-1 in the 1960s to 3-1 today.
"The system will crash and burn without changes," he said.
Forbes took up the cause of the "frail and minorities," who claim Social Security discriminates against them because of their low life expectancy.
Forbes stressed that privatization is the best system for the young workers of America, and that they are the ones who will be most affected by the outcome of the Social Security debate.
Forbes explained the plan that would give today's workers the most return on their money.
Individuals would put their earnings in "safe, monitored accounts that are well diversified and low-risk," he said.
Even at their low risk, the rate of return would be at least 3 percent as long as "we don't muck up the economy with taxes and regulations," he said.
Individuals would also be free to invest in bonds or reduce their money's exposure to the stock market over time.
He praised the individuality of the privatization plan, saying, "You pick your own retirement age. ...Washington politicians should not get to tell you when you get that money."
And, he argued, with personal accounts, there would be no Social Security surplus for Congress to raid. Instead, Forbes said, the invested money would be put to work, which strengthens the economy.
He rejected the proposed alternative plan of raising the payroll tax, keeping in stride with his usual anti-taxation stance. Since taxes are a burden on workers and businesses, Forbes said, raising the payroll would decrease the number of jobs.
He blamed payroll tax raises in the 1930s, 1970s and 1980s for economic troubles the country went through in those decades.
"Why [politicians] can't understand this, I don't know. That's probably why I'm not in the White House," said Forbes, who campaigned for the Republican nomination for president in 1997 and 2000.
He finished by reminding students that this debate was not about his future in Social Security, but theirs. Reform will help young workers, low-income workers and middle-class workers, he said.
After the speech, Forbes posed for pictures with students and signed autographs, most of them on his magazines.
Forbes impressed Michael Roberts, a junior in the Kogod School of Business.
"This speech definitely reinforced my ideas about privatization," he said. "Private retirement accounts are a great idea. It creates an ownership economy and puts control directly in the hands of recipients. It would offer higher benefits for all."
Other students are not fans of Forbes.
"Steve Forbes is a rich man who doesn't know his ass from his elbow as far as politics go, but insists on running for office as a way of flaunting his riches in front of a poorer populace," said Dave Tauster, a junior in the School of International Service.
