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Greenspan Testifies Today, Social Security On Agenda.

Yesterday, Democrats in Congress, cognizant that Greenspan's past support of Social Security reform will likely continue in today's testimony, tried somewhat pathetically to preempt the Maestro:

"Mr. Corzine and fellow banking committee Democratic Sens. Charles E. Schumer of New York and Jack Reed of Rhode Island held a press conference yesterday to pre-empt Mr. Greenspan's remarks.

They said that Mr. Greenspan is a critic of excessive government debt and that the Social Security Commission he led in the 1980s said Congress "should not alter the fundamental structure of the Social Security program or undermine its fundamental principles.'

Democrats said Mr. Bush's private-accounts plan would both undermine Social Security's fundamental structure and put the government trillions of dollar in debt, both of which Mr. Greenspan traditionally has not supported.

'We hope he will stay true to many of the things he talked about' in the past, Mr. Corzine said.

Mr. Reed said Republicans 'will be looking to interpret whatever he says as an endorsement, so Democrats must counter that.

Mr. Greenspan's comments provided crucial momentum a few years back to Mr. Bush's tax cuts. Those comments, Mr. Schumer said, were 'misinterpreted' as an endorsement.

'We don't want the same thing to happen again,' he said."

Hilarious. Greenspan supported the President's tax relief because it make economic sense, period.

The petrified, nervous look on the face of the Chuck Schumer, who incidentally was just named co-porker of the month (with Hillary Clinton) by Citzens Against Government Waste, was an absolutely priceless thing to witness.

Both sides, though, ought to be at least somewhat nervous; Greenspan, the high priest of the American economy, respected by almost everyone for his impartiality, is brutally honest and will likely give Democrats some ammunition (or at least SOMETHING to cling to) on the subject of deficits (which, as WILLisms.com noted, are actually getting smaller due to the wonders of the Laffer Curve). Democrats also want to get Greenspan to "admit" that personal accounts are not the total solution to the problem, and the government will have to borrow in the short-term to cover the transition costs.

While personal accounts may not be a short-term panacea, over the long haul it's the only solution. The argument has been rehashed a million times over, but the "costs" of reforming Social Security are not new costs. They are merely a recognition of, and an early paying off, of already-existing obligations.

Greenspan's testimony is not make-or-break for either side, but it could give crucial inertia to the President's case for reform. Greenspan will also likely drive a stake through the Democrats' absurd notion that "there is no crisis."

Schumer said:

"We think the other side is getting kind of desperate, so they are going to try to take whatever Chairman Greenspan says and make it like an endorsement of the president's plan."

Senator Schumer, with his frantic, impromptu, preemptive press conference seems like the desperate one.

-Look for Democrats to question Greenspan just below the threshold of badgering, in order to extract anything they can use.

-Look for Democrats to incorporate innocuous and tangential comments by Greenspan, even if they do not support their case, into their talking points.

The spotlight, even more than usual, is on Chairman Greenspan.

Greenspan's semi-annual testimony will go for two days, Wednesday and Thursday. WILLisms.com will bring you full coverage of it, so stay tuned.

Posted by Will Franklin · 16 February 2005 07:46 AM

Comments

Posted by: Frank at February 16, 2005 10:21 AM