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Wednesday, May 05, 2004

Going Positive: Admirable Qualities of John Kerry (Part 4)


I especially liked a couple of the answers Kerry gave during an interview on economic policy with the Wall Street Journal on Monday. First, on Social Security, Kerry correctly points out that the system is in pretty good shape. Although he doesn't mention it, Social Security is currently solvent through 2041. After that, it can continue paying about 70% of promised benefits, more or less forever, with no changes at all. In 20 or 30 years, we might need to raise payroll taxes. Unless of course, the amazing productivity growth that began during the Clinton administration holds up...
WSJ: What does it mean to be a fiscally responsible Democrat over the next 10 years and also deal with Social Security and Medicare?... In the case of Social Security, if you reject privatization, as you do, isn't it pretty obvious there are limited amounts of choices? We know what needs to be done. The question is how can we do them when you've taken things like raising the retirement age off the table?

KERRY: Because I don't believe that that is a necessary response or action to any of the things. I just don't believe it is. First of all, right now, the reason Social Security is challenged is because George Bush has an unaffordable tax-cut plan in place, an irresponsible, unaffordable tax plan. And that's why we're losing 10 years of Medicare. We were in a good position to be responsible about Social Security. We put ourselves there. And that's what I intend to try to get back to. And it begins with a strong economy. It also extends to being willing to be bipartisan, and trying to pull people together and find out what we need to do. I've heard the Cassandras of these programs for the 20 years I've been in the Senate, an each time we've been able to respond without doing the draconian things everybody suggests.


I also liked Kerry's answer to a question about whether to eliminate subsidies to Fannie Mae and Freddie Mac, the government sponsored companies that provide a secondary market in mortgages. Kerry says "I don't know." I give him a lot of credit for that and I think it's a sign of (admirable) self-assurance that he can admit that he doesn't have an answer. I can just imagine Bush trying to answer a question like that, and rambling on about the wonders of homeownership, the American dream, and probably free enterprise too.
WSJ: Do you think there's an argument for removing the federal subsidy from Fannie Mae and Freddie Mac?

KERRY: I don't know the answer to that. I have not examined that. They are enormously successful, enormously powerful entities with a huge share of the market. They've done a lot though for housing and to provide for the economic growth of the country. On the other hand they're pretty big. You know, I just haven't made any decision on that. I really would want to have a review and have some smart people weigh in and see what the implications are.
 
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