Cato Daily Dispatch for November 21, 2003
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White House Dusting Off Personal Retirement AccountsChina Strikes Back, Threatens Tariffs
Energy Bill Vote Blocked
White House Dusting Off Personal Retirement Accounts
"President Bush's aides are reviving his long-shelved plan to let workers divert some Social Security taxes into stocks as a reelection issue, gambling that market drops have not soured voters on the politically risky idea," The Washington Post reports. "Republicans on Capitol Hill have refused to touch his 2000 campaign proposal to overhaul the nation's largest domestic program, and some of his allies remain leery of pushing an issue that Democrats have long used to woo senior citizens by charging 'privatization.'"
In an article published last year, Michael Tanner, director of Cato's Project on Social Security Choice, offered that Social Security reform may not be as politically risky as once thought. "While much pre-election commentary was devoted to a few Republicans who attempted to blur their position on Social Security in those races where candidates took clear positions in support of individual accounts, it was a winning issue," Tanner writes in "Social Security and the 2002 Election." He continues, "Across the country, candidates who had the courage to touch the issue not only survived, they won."
A Cato Institute poll conducted by Zogby International last year, found that 68 percent of Americans continue to support allowing workers to invest a portion of their Social Security taxes in personal retirement accounts.
"Social Security reform is a necessity, not a luxury," Tanner says. "In just 15 years, by 2018, Social Security will begin to run a deficit, spending more on benefits than it takes in through taxes. Overall, Social Security faces unfunded liabilities of nearly $26 trillion. Without reform, today's younger workers face either massive tax hikes or significant reductions in their benefits."
China Strikes Back, Threatens Tariffs
"Fears that the United States is on a collision course with its major trading partners intensified Thursday after China threatened to impose tariffs on U.S. goods and abruptly canceled a trip to buy American farm products," the Los Angeles Times reports.
"The actions by Beijing followed the Bush administration's reluctance to lift tariffs on imported steel and its decision this week to restrict imports of Chinese-made bras, nightgowns and knit fabrics. Domestic textile manufacturers said they were being hurt by a surge in those products from China."
Speaking yesterday at the Cato Institute's 21st Annual Monetary Conference, Federal Reserve Chairman Alan Greenspan said that protectionist actions "could significantly erode the flexibility of the global economy. Consequently, it is imperative that creeping protectionism be thwarted and reversed."
In "Threadbare Excuses: The Textile Industry's Campaign to Preserve Import Restraints," Cato Institute Trade Policy Analyst Daniel J. Ikenson says that if the United States fails to deliver real liberalization in the textile trade, "America's role in encouraging economic liberalization abroad will be needlessly compromised."
Energy Bill Vote Blocked
"Opponents of a massive energy bill on Friday blocked the Senate from taking a final vote and sending the measure to President Bush," The Associated Press reports. "On a 57-40 vote, supporters failed by three votes to cut off debate on the legislation, which they said would increase and diversify energy production and provide farmers an economic boost by expanding use of corn-based ethanol."
In "A Complete Waste of Energy," Cato Director of Natural Resource Studies Jerry Taylor and the Sierra Club's Dan Becker write: "Make no mistake, the ethanol program is about nothing other than fattening ethanol producers-with agribusiness giant Archer Daniels Midland being the biggest corporate winner-at the expense of others. And ADM counts on the farmers who grow the corn to provide the political muscle. Ethanol does nothing to improve air quality. Making ethanol requires almost as much energy as you get from burning it, and using it increases smog-forming emissions."
Shortly after the Senate's vote, Taylor said: "The reality is that virtually every section of this bill is a waste of taxpayer money and a threat to our nation's economic health. I will only rest easy when I see this bill cremated and its ashes scattered at sea."
Wyatt Dubois, editor, wdubois@cato.org
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