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Cato Daily Dispatch for June 23, 2005

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

New Social Security Plan Diminishes Personal Accounts

"After watching the Social Security debate from the sidelines, House Republican leaders yesterday embraced a new approach to Social Security restructuring that would add individual investment accounts to the program, but on a much smaller scale than the Bush administration favors," reports The Washington Post.

"The new accounts would be financed by the Social Security surplus -- the amount of payroll tax revenue not needed to pay current benefits. That money is now used to fund other government activities and is expected to run out after 2016 as the baby-boom generation retires."

In a memorandum to Deputy White House Chief of Staff Karl Rove, Cato's president Ed Crane criticizes the Bush administration's emphasis on solvency, rates of returns and transitional costs when the real focus should be on ownership and freedom when advocating reform: "Seriously, this should be an emotional issue about liberty and opportunity, not solvency dates. The concept of an Ownership Society is brilliant. Unlike the New Deal, the New Frontier or the Great Society, Ownership Society actually means something -- something integral to the essence of America. That essence is a respect for the dignity of the individual, which is axiomatically enhanced when one has more control over one's life. That is what personal accounts provide."

Crane adds: "In addition to more control over your life through personal accounts, all the ancillary benefits of ownership should be enthusiastically played up by the President: the pride one has in having provided for his or her own retirement, as opposed to being a supplicant of the state; the security of knowing the government can't take the money away (which they do whenever they raise the payroll tax or push back the retirement age); and perhaps most of all, the knowledge that your loved ones may benefit from your labor."

Flag-burning Ban Reaches Senate

"A constitutional amendment to outlaw flag burning cleared the House on Wednesday but faced an uphill battle in the Senate," according to The Chicago Sun-Times. "The 286-130 outcome was never in doubt in the House, which had passed the measure or one like it five times in recent years. The amendment's supporters expressed optimism that a Republican gain of four seats in last November's election could produce the two-thirds approval needed in the Senate, after four failed attempts since 1989."

Cato's vice president for legal affairs Roger Pilon states in his March 23, 1999 congressional testimony before the Subcommittee on the Constitution that there is "all the difference in the world" between defending the right to desecrate the flag and defending flag desecration itself.

"It is the difference between a free and an unfree society," Pilon explains. "This amendment, as it tries to shield us from offensive behavior, gives rise to even greater offense. By offending our very principles, it undermines its essential purpose, making us all less free.

" ... Flag desecration of a kind that this amendment would authorize Congress to prohibit is political expression and, second, that political expression is precisely what the Framers wanted most to protect when they drafted the First Amendment. In a pair of cases decided in 1989 and 1990 -- involving first a state, then a federal statute -- the United States Supreme Court said as much, which is why those who want to prohibit people from engaging in such acts have resorted to a constitutional amendment -- an amendment that would, for the first time in over 200 years, amend the First Amendment. That alone should give pause."

Public Broadcasting Faces Cuts

"The House of Representatives takes up legislation today that would strip more than a fourth of federal dollars from public broadcasting -- an effort that Republican backers are calling fiscal prudence but which Democrats say is heavy-handed politics," reports The St. Louis Post-Dispatch.

In "Defund PBS," Cato executive vice president David Boaz asks, "In a 500-channel world, why do the taxpayers need to subsidize one more channel?"

"It's time to establish the separation of news and state," Boaz writes. "Journalists should not work for the government. Taxpayers should not be forced to subsidize news and public-affairs programming. One dirty little secret that NPR and PBS don't like to acknowledge in public debate is the wealth of their listeners and viewers. But they're happy to tell advertisers -- oops, I mean sponsors -- about the affluent audience they're reaching. A few years ago NPR enthusiastically told advertisers that its listeners are 66 percent wealthier than the average American, three times as likely to be college graduates, and 150 percent more likely to be professionals or managers. Tax-funded broadcasting, like tax-funded arts, is a giant income transfer upward: the middle class is taxed to pay for news and entertainment for the upper middle class. It's no accident that you hear ads for Remy Martin and 'private banking services' on NPR, not for Budweiser and free checking accounts."

Holiday Dmitri, editor, hdmitri@cato.org