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tentionally, by one of the supporters of government invest-

ment, Jonathan Cohn, writing in the New Republic.  "It would

be easy to prohibit manipulation of the market for political

reasons," Cohn wrote.  "All you would have to do is assign

responsibility for the investments to a quasi-independent

body, then carefully limit how it can make investment deci-

sions."22  In other words, the new agency would be indepen-

dent except that Congress would set restrictions on its

investment decisions.

Supporters of government investment suggest a second

means of avoiding social investment: the investment would be

made only in index funds, eliminating the choice of individ-

ual stocks.  However, that does not eliminate social invest-

ment questions, since there would remain the issue of what

stocks should be included in the index, whether an existing

index or a new one created just for Social Security.

The Federal Thrift Savings Program: An Imperfect Analogy

Supporters of government investing often cite the

federal thrift savings program as an example to show that

government pension funds can avoid politicization.  It is

true that, so far, the TSP has avoided social investment and

interference with corporate governance.  However, there are

several important differences between the TSP and a govern-

ment-invested Social Security program.

Perhaps most important, the TSP is a defined-contri-

bution program with individually owned accounts.  Workers do

have a property right in their account, which is not true of

Social Security.  In the case of Fleming v. Nestor (1960),

the U.S. Supreme Court held that individuals have no proper-

ty right in Social Security.  Allowing the government to

invest a portion of Social Security revenues in capital

markets would do nothing to alter that.

Therefore, a government-invested Social Security pro-

gram would be far more akin to defined-benefit state employ-

ee pension plans.  A 1990 congressional report concluded

that while workers acquire an interest in pension funds once

they are vested, they have no legal ownership rights.  The

report went on to note that it would be equally incorrect to

say that government "owned" the funds because the govern-

ment's discretion in spending or disposing of the funds is

limited under state trust law and the Internal Revenue

Code.23  The report concludes that there is no exclusive

ownership by either party,24 and that ownership, in any

case, may be unimportant because "public defined benefit