SOCIAL SECURITY AND SURPLUSES: NO PLAN YET

So President Bill Clinton proposes to apply anticipated federal surpluses of $4.85 trillion over the next 15 years to "solving" Social Security's problems. We say anticipated surpluses because such forecasts, stretching out over years and ignoring likely recessions and other events, are notoriously unreliable. Recall that short years ago, we heard dreary forecasts of huge deficits "as far as the eye could see."

Then there is the fact that the surpluses are primarily the result of the higher federal taxes Mr. Clinton and the Democrats saddled working Americans with back in 1993. Those sharply higher taxes happened to catch the American economy in a cycle of recovery of such historic strength that their dead weight wasn't enough to stop economic growth. Sounds to us like another argument for tax cuts.

As for the Clinton proposal itself, its underpinnings promptly came under withering fire from skeptical senators who struck telling blows. "Only in Washington would this kind of creative accounting be considered," said Sen. John Chafee, R-R.I., told Treasury Secretary Robert Rubin at a congressional hearing. Sen. Phil Gramm, R-Texas, was less generous. Referring to Rubin's previous career as an investment banker, Gramm said that if Rubin had used "accounting like this in private practice, he would be in prison now rather than sitting before us." To another Clinton administration official at another hearing, Senate budget panel chairman Pete Domenici, R-N.M., said, "Your accounting is beyond my comprehension."

Disapproval also came from the Concord Coalition, a bipartisan budget watchdog group. In a written statement, the coalition called the Clinton proposal "three-card monte."

Harsh words, but justified in this case. White House officials argue that reserving trillions in budget surpluses for Social Security would extend the date the program would deplete its trust fund from 2032 to 2055. Under the plan, the government would put special Treasury bills into Social Security's trust fund -- in effect promising that the surplus money will be used to help Social Security. Mr. Clinton proposes no change in Social Security benefits or taxes. As a result, his proposal doesn't change the fact that in 2013 the program's annual expenditures will begin to exceed its annual revenues.

Congressional Republicans who take a dim view of the Clinton proposal say they will press for across-the-board, 10 percent tax cuts for all Americans. Clinton and his advisers believe they have the Republicans trapped between their proposal to "save" Social Security and advocating "tax cuts for the rich," presumably on the theory that anyone who works for a living, and thus would benefit from a tax cut, is "rich." This is more of the Clinton divide-and-conquer approach to governance. At least it has forced Republicans back toward their strong suit as advocates of tax cuts and smaller government.

As for the problems of Social Security over the long haul, answers won't be found in schemes such as the Clinton scam. Sooner or later, answers will be found in a partial or complete, phased-in privatization of the system. And this reform will be characterized not by a government takeover of the stock market, which Mr. Clinton proposed to move us toward in his State of the Union address, but rather through truly private accounts that allow individuals to direct their own investments, selecting which options they prefer.

The Clinton proposal to dedicate the "surplus" of the next 15 years to Social Security can be seen as another piece of cheap political gamesmanship for which he has become famous. It appears to "solve" a problem that would, in reality, only worsen, leaving it worse off, another mess for his successors to clean up.