NEWS

The Michigan Daily - Friday, October 8, 2004 - 7

ELECTION
Continued from page 1
to avoid tax increases or to decrease benefits, at least
in the short term, to solve the problem.
"Neither (Bush nor Kerry) has a real proposal,"
said Peter Diamond, an economics professor at the
Massachusetts Institute of Technology. "A politician
that goes to the voter and brings bad news hurts his
election chances."
Both candidates have avoided being the bearers of
bad news for the large part, though they sometimes

professor.
He added that Bush's less specific plan is based on
the guidelines of not increasing the Social Security
payroll tax, not changing benefits and creating a plan
that makes room for voluntary personal retirement
accounts.
Some speculate that the President's reluctance
to accept the committee's proposal stems from
fear that he would then have to defend a detailed
proposal with its shortcomings and criticisms
before the election.
The lead criticism comes from a report from the
Social Security Administration, which finds that under
the committee's proposal of creating a system with
personal accounts. Social

address the topic.
"The Social Security
who are on Social Secu-
rity today," Bush told a
crowd in Florida a few
weeks ago. "Baby boom-
ers like me, I think, are in
pretty good shape when it
comes to the Social Secu-
rity trust. But we need to
worry about our children
and our grandchildren."
But with projec-
tions that Social Secu-
rity funds will run dry
within the next 15 years,

trust is solvent for those

"A politician that goes to
the voter and brings bad
news hurts his election
chances.
- Peter Diamond
Massachusetts Institute of
Technology Economics professor

Security could find itself
in a deficit as early as
2006 and it could take up
to 70 years to get out of
the red.
But the Congressional
Budgetary Office, which
evaluates fiscal policies,
finds that under this pro-
posal Social Security
would actually be bal-
anced 20 years earlier

In April of this year, Kerry told Tim Russert of NBC's
Meet the Press, "I'm not going to cut Social Security
benefits. I'm not going to extend the retirement age. And
we're not going to have to raise the premiums."
In other interviews and speeches, Kerry has told audi-
ences that he also will never privatize Social Security,
sticking with the program's original goal of providing
benefits guaranteed by the government.
Since he has focused more on what he will not do then
on actual plans to save social security, researchers as
well as Republicans assume that Kerry will do nothing
but wait for the economy to recover.
"If you talk to some of Kerry's advisors, off the
record, they'll tell you, he doesn't have a plan for Social
Security," Smetters added.
Smetters said under Kerry's plan, his only option is
to increase the money in the Social Security Trust Fund
by improving the economy. But this is only a short-term
solution, he added, because a surplus in the Social Secu-
rity funds will eventually run out.
In fact, since 1983, when Social Security reform began
to rake in a surplus by reducing benefits and increasing
the payroll tax, the money has largely been used to bal-
ance the federal deficit.
Researchers have proposed alternative solutions,
among them a proposal by Diamond, which calls for
a combination of raising taxes and cutting benefits
to balance Social Security.
Diamond also suggests raising the maximum amount
of one's income that can be taxed for Social Security,
saying that the current system allows wealthier Ameri-
cans - who live longer and receive benefits longer - to
disproportionately benefit from the system.
The maximum taxable amount is yet another gray
area, in which both candidates have made vague or
inconsistent remarks.
This and all the other gray areas in their policies,
have allowed Bush and Kerry to slip by without solid
plans on saving Social Security, which could come
at the expense of the current generation of young
Americans.
A Gallup Poll from March shows that 58 per-
cent of young people ages 18 to 24 are either very
or somewhat dissatisfied with the current state of
Social Security and Medicare.
"It's really just the selfishness of previous genera-
tions," Smetters said. "A lot of times they may not
realize they're extracting so much, but they are."

FRIEZE
Continued from page 1
said.
Faculty in the Frieze Building
are thrilled at the prospect of a new
facility, but expressed some concern
with regard to the displacement of
academic departments located in
the building during the two years
of construction. Units such as the
Asian Language and Cultures, Com-
munication Studies and the Center
for Judaic Studies are unaware of
their fate. The Provost's Office is
currently working to create plans
for temporary relocation.
Faculty in the Theatre and Drama
Department, who are set to move
to Walgreen Drama Center and the
Arthur Miller Theater on North
Campus once construction begins,
are confused about their move. Eric

Fredricksen, chair of the Theatre
and Drama Department, said the
department was told by the Wal-
green Drama Center planning com-
mittee that the facility would not
be ready until 2007 at the earli'est,
while the administration is plan-
ning to move them in 2006 once
construction starts.
The University said the theater
will be ready by the time the demo-
lition of Frieze begins.
But students who attend classes
in the Frieze Building praised the
administration's decision to tear
down the building, even though
many acknowledged that they would
not reap the benefits of the planned
construction.
"Even if I'm not going to, be
around, its, good to see something
being done," LSA freshman Kenata
Martins said.

Bush's loosely laid out plan of creating personal
investment accounts for young people to collect
after retirement most likely will not help the chil-
dren of baby boomers, and in some cases not even
their grandchildren.
The reason behind this is what researchers point to
as the transitional costs of transforming Social Securi-
ty into a program that allows for personal investment,
as Bush is proposing. They also say this transition
will further exhaust the Social Security Trust Fund
and reduce benefits in the short term.
Analysts say Bush's plan is less concrete than it
seems. In 2001, Bush created a committee to develop
a Social Security plan, but he has not formally accept-
ed either of the committee's two proposals.
While Kerry and others have criticized the
president's ideas about Social Security reform,
the plan they are blasting is often that of the com-
mittees, which Bush has yet to endorse, said Kent
Smetters, a University of Pennsylvania business
the michigan daily

than the SSA's prediction.
The differences, however, are attributed to methods
of analysis.
For this reason, Diamond remains critical of per-
sonal investment accounts, saying that they do not pro-
vide a solution for retirees in the immediate future.
"President Bush thought the money would just
appear," Diamond said about the deficit that will be
created in the next 70 years, if personal accounts are
to be instated.
But he added that despite the problems with
Bush's plan, he finds nothing more promising in
Kerry's campaign.
"Kerry doesn't have a plan because if he had a plan
he would be delivering bad news, and then the Presi-
dent could say, '(Kerry) wants to cut your benefits and
I would never do that,' " Diamond said. "In fact very
few Democrats have filed a plan on Social Security."
Kerry has said hardly anything on the topic that
can be construed as actual policy, and what he has
said has been vague.

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APP'-

I

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