Once again, that is the *only* way to describe the Bush administration's policy development process.
I read Bush's opening statement at his press conference last night:
Text of Bush's Press Conference-Part I: The money from a voluntary personal retirement account would supplement the check one receives from Social Security.
In a reformed Social System, voluntary personal retirement accounts would offer workers a number of investment options that are simple and easy to understand. I know some Americans have reservations about investing in the stock market, so I propose that one investment option consist entirely of treasury bonds, which are backed by the full faith and credit of the United States government.
Options like this will make voluntary personal retirement accounts a safer investment that will allow an American to build a nest egg that he or she can pass on to whomever he or she chooses.
The "build a nest egg" part... The "invest in Treasury bonds" part... Let's mosey on over to the Federal Reserve and look at the safest long-term investment the U.S. Treasury offers: the twenty-year inflation-protected TIP:
FRB: H.15--Selected Interest Rates, Web-Only Daily Update--April 28, 2005: Inflation-indexed: 20-year 1.83 1.86 1.87.
What the Federal Reserve is telling us is that the 20-year TIP is currently providing a real yield of 1.87% per year. What Bush is not telling you is that, under the Bush plan, if you divert $1000 from your Social Security to private accounts, that amount is clawed back--charged to an account associated with your normal Social Security benefit, that amount is then compounded at 3% per year plus the rate of inflation, and then after you retired deducted over time from your normal Social Security benefit.
If you are 45 and if Bush's plan were available today...
Follow George W. Bush's advice, divert $1,000 into your private account, invest it in TIPS, and at the 1.85% per year interest rate you will indeed by able to collect an extra amount worth $10.11 a month in today's dollars when you retire at 65...
But the clawback would reduce your normal Social Security benefit by $14.16 a month. You're $4.05 a month behind.
"Building a nest egg." Feh!
Did nobody inside the White House bother to run the numbers? Did nobody care?
And now I am told that the White House is wheeling out, to explain the details of his plan... Cathie Martin, Deputy Assistant to the President for Communications, will answer your questions about Strengthening Social Security and Future Generations. Are all the substance people in the White House fleeing from this? Where are they?