Monday, March 15, 2010

Does Paul Ryan know where his Roadmap leads?

The fact that Paul Ryan's plan to privatize Social Security might ultimately lead to a federal bailout caught our eye nearly two years ago. And it caught the CBPP's as well ... and Ryan's response suggests the celebrated wonk has no idea of the implications of his bill.

Cost of the Social Security Guarantee

Ryan’s Assertion : Ryan challenges our statement that his requirement that the Treasury bail out private-account holders for stock-market losses could cost $2.9 trillion and that this cost is not reflected in the CBO report on his plan. He claims that CBO explicitly estimated this cost and included it in its projections of his plan.

Our Response : Once again, Rep. Ryan is mistaken and our statements are accurate. We wrote, “These potential bailout costs — like the cost of the plan’s very large tax cuts — are not reflected in the CBO estimates that Rep. Ryan cites when touting the plan’s fiscal responsibility.” We confirmed the accuracy of this statement with CBO before issuing our report. CBO conducted separate analyses of the proposed benefit guarantee, but CBO’s budget estimates reported in Appendix II of the Ryan plan do not include the cost of the guarantee. Moreover, the $2.9 trillion cost estimate does not come from us, as Rep. Ryan implies. Our report clearly states that it is the estimate of the Chief Actuary of the Social Security Administration, based on an earlier version of Rep. Ryan’s plan and taking stock-market risk into account.

Why oh why do people take Paul Ryan seriously?