How to save U.S. Social Security from bipartisan reform

A few years back, when an eager U.S. diplomat was haranguing the WHO Executive Board about the need to reform the World Health Organization’s regular budget, I pressed the microphone override button temporarily to cut off the speaker, in order to explain to the WHO board members that when an American official uses the word “reform,� in American English he means “reduce,� “cut� or “slash� the budget, not reform, restructure or improve it.

The board members got the point, and thus the WHO regular budget (the mandatory dues of member states) remained unchanged. All the United States could do was cut voluntary contributions for WHO and U.N. human reproduction research and family planning (now restored by the Obama administration).

That same U.S. official then proposed that WHO and the United Nations should no longer “fund� up front their joint staff pension fund, staff health insurance fund or terminal payments accounts (he called them “slush funds�) but rather WHO and the United Nations should rely on receipt of future budget contributions by member states, such as the United States (exercising in effect the power to tax).

I intervened again to explain to the board that, apart from the unreliability of future U.S. contributions to the U.N. system, it was precisely because of our policy and practice of upfront funding that the WHO and the U.N. staff entitlement programs worked so well — with full benefits, solvency and affordable costs — in some 200 countries (including the United States). The U.N./WHO programs remain so even today, in the face of the current global economic recession. Knock on wood.

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President Dwight D. Eisenhower, in his last year of office in 1960, warned us against the dangers of the “military-industrial complex,� and decried the CIA’s “legacy of ashes� left to posterity, but he also predicted that if any future American political party attempted to curtail or eliminate Social Security, that party would simply cease to exist.

President George W. Bush, who failed to heed Ike’s warning, tried to do just that by the back door, proposing to “privatize� Social Security. Had he succeeded, Social Security would have collapsed, and the Republican party would have ceased to exist. As it is, there is a new “bipartisan� movement to push the new Obama administration into making the same Bush mistake all over again.

This time, to take the Eisenhower onus or blame off any one political party, the Brookings Institute and the Heritage Foundation have issued a joint report, euphemistically titled “Taking Back Our Fiscal Future,� which claims that Social Security faces impending bankruptcy, and proposes to avert the crisis by means of a “bipartisan reform of entitlement spending,� in the form of budget caps on future benefits.

As William Greider points out in his new book, “Come Home, America� (Barnes & Noble, 2009), “when official America talks about ‘bipartisan compromise,’ it usually means the people are about to get screwed.�

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The fact of the matter is that the Social Security system has amassed a surplus of $2.5 trillion that is still growing, and the Congressional Budget Office reports that the system can sustain its benefit obligations for at least another 40 years, even if nothing is changed now. The problem is that the U.S. government has been borrowing our taxpayers’ money to the tune of $200 billion a year for other purposes, including the war in Iraq.

A quick fix would be to stop invading Social Security, and to remove the current income ceiling of $107,000 for purposes of contributions to Social Security. Let everyone pay their fair share. The problem is not really one of insolvency or lack of funding: It’s one of lack of administrative competence and political will.

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So, here’s a radical solution to the U.S. entitlements problem: Let the not-for-profit United Nations establish and initially administer a U.S. national entitlements system, including Social Security combined with a secure pension plan based on the highly successful (and solvent) U.N. staff pension system, supplemented by a budgetary safety net for the really poor. Unlike the U.N. Oil-for-Food Program, where the United States threatened to impose its veto if the United Nations controlled Iraq’s petro-dollar accounts (thus leading to fraud and paybacks to middlemen and to Saddam Hussein himself), the United Nations would initially operate the U.S. entitlement accounts until U.S. officials demonstrated an honest capacity to do so. The winner here, of course, is the American people, who own the money and the benefits in the first place.

Meanwhile, let the not-for-profit World Health Organization establish and initially administer a universal U.S. national health insurance system similar to WHO’s highly successful (and solvent) staff health insurance program, which is essentially a “single-payer� system, with appropriate price/cost controls, and room for standardized and regulated participation of private enterprise (WHO currently uses Aetna for claims processing in the United States). The WHO plan now operates successfully in some 200 countries.

If, after a couple of years of practical demonstration, the U.S. government proves capable of managing its own entitlement programs, then the United Nations will hand over full responsibility for the U.S. national pension system, and WHO will hand over full responsibility for the U.S. health insurance system to the U.S. government. This is a win-win proposition. Tongue could then be removed from cheek, and the American people will live happily ever after.

Sharon resident Anthony Piel is a former director and legal counsel of the World Health Organization.