(Note: this is the first in a series of critical looks at George W. Bush's second-term agenda.)

Here we go again: President Bush is making yet another push for privatizing Social Security, as part of his pledge to create an "era of ownership" if he is re-elected for a second term. In a new TV ad, the Bush campaign is touting the plan as an opportunity for people to "own a piece of their retirement."

The proposal, like the one put forward in the 2000 campaign, would allow workers to keep a portion of their payroll taxes and invest them in stocks, via government-sponsored accounts. Bush has argued before that workers could get a higher rate of return in the stock market than they do from Social Security. On this, he's right -- some workers probably could. But that doesn't excuse the fact that his plan is as nonsensical now as it was four years ago. 

The biggest problem with the plan, as countless analysts have pointed out, is easy to see. The Social Security program is currently funded by payroll taxes from the current generation of workers, who pay into system so that the government can pay out benefits to retirees. In essence, every generation owes a debt to the previous generation: we pay for our parents' and grandparents' retirement, just as they paid for their parents and grandparents. And so on. If young workers were allowed to divert their savings into a private account, there would be fewer funds to pay for this generation of retirees, even though those workers have already paid into the system.

So if the government wanted to divert payroll taxes for all workers under, say, the age of 30, it would have to come up with additional money to pay those retirees over the age of 30. Economists estimate that the transition could cost at least $1 trillion -- money that the government just doesn't have, especially in the wake of mounting deficits. The alternative is to either raise existing payroll taxes, or cut future benefits, neither of which Bush is proposing. So the president can claim that he can magically fix the system, but his math just won't work out.

One might also question Bush's assumption that workers would get consistently higher rates of return in the stock market. As Robert Kuttner argued back in 2001, the stock market might not continue to rise at a steady rate, especially after absorbing a sharp increase during the 1990s. (The stock market has already started leveling off over the past few years.) At the same time, there's always the risk of stocks going down. A worker could easily see his or her savings vanish after a financial crisis, or worse, another corporate scandal. Although there are ways to minimize this risk, there's no way to eliminate it. Some portion of workers will inevitably retire at the wrong time -- right after a stock market crash, say -- and lose their savings. In an economy where workers already suffer from heavy economic insecurity, do they really need this additional worry?

It's not as if the current system is in crisis, either, despite what conservatives claim. The most recent analysis by the Congressional Budget Office found that, even if no changes are made, the program will be able to pay full benefits to its retirees until 2053. If the country can turn its economy around, and wages start growing faster than inflation, than the outlook for Social Security will continue to improve -- since payroll revenue will rise faster than benefit payouts, which are index to the cost of living. With 50 years to go, there should be plenty of time to patch up the program in a fairly painless manner -- Peter Diamond and Peter Orszag outlined one such solution in Boston Review earlier this year.

The CBO's relatively healthy projections haven't stopped the programs critics from spinning the numbers. Most famously, on February 25, Alan Greenspan argued that the massive budget deficits would necessitate deep cuts in Social Security (along with other spending programs.) Of course, as Harry Holzer noted, it was Greenspan himself who, in 1982, advocated a payroll tax increase in order to build up a trust fund to ensure Social Security's solvency. During the 1990s, the government used this surplus to shore up its general budget projections and pay down the deficit. But as a program, Social Security still owns the surplus it built up -- the surplus is simply "owed" to the program by the federal government. Those who claim, as Greenspan does, that Social Security is now running a "deficit" are simply being disingenuous. As the CBO report makes clear, if you count the surplus that Greenspan helped create, Social Security will be solvent for half a century. 

Of course, that means the general budget is running a greater deficit than is usually reported. For that, blame the tax cuts, not entitlements. As Jonathan Chait has pointed out in The New Republic, the deficits for Social Security and Medicare combined over the next 75 years amount to 2.2 percent of GDP. At the same time, the Bush tax cuts will cause a revenue loss also equal to 2.2 percent of GDP over that period. Social Security could be easily shored up, if we got our priorities straight. This is not to say we don't need to reform our entitlement programs -- we certainly do -- but it's dishonest to say that the programs are hopelessly bankrupt and drastic measures are needed.

It will come as no surprise if, in the months ahead, Bush tries to use the same faulty arguments against Social Security. It is surprising, however, that the Republicans are ready to revisit the privatization issue once again. During the 2002 midterm elections, the party scurried away from the issue altogether. Norm Coleman, the eventual winner of the Minnesota Senate race, was heard saying, "I don't support privatizing Social Security, and I'll fight against anybody who would do that." Likewise, the NRCC tried to deny that any Republican had ever talked about privatization. At the time, it appeared as if the Enron scandals had forced conservatives to back away quickly from any and all talk of privatization. 

But with corporate scandals faded from public memory, it seems that Republicans are ready to strike once more, bringing out all of the usual distortions and demagoguery. It's too bad: a smart, realistic plan to privatize social security could help spark an intelligent debate over pension reform and the shape of future entitlement programs. But Bush is offering nothing more than a dishonest proposal and a few sappy catchphrases. It was a waste of time back in 2000, and it's a waste of time now.