Cato Daily Dispatch for December 15, 2004
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Bush Making Progress toward Social Security ReformTort Reform Will Be Part of Economic Forum
Worry over Iranian Influence in Iraqi Elections
Bush Making Progress toward Social Security Reform
"It will be months before President Bush and members of Congress agree on how to restructure Social Security, if they come to terms at all. But the rough contours of what Bush has in mind have begun to emerge, and battle lines are forming," according to the Los Angeles Times.
"Bush has said he wants to shore up the finances of the Social Security program and allow workers to shift some of their Social Security payroll taxes into private investment accounts, but he has not endorsed a specific proposal."
Reps. Sam Johnson (R-Tex.), Pat Toomey (R-Penn.) and Jeff Flake (R-Ariz.) introduced a bill in Congress early this year based on Cato's proposal for Social Security reform, which would allow younger workers to voluntarily invest half of their Social Security tax in individual accounts. Cato president Edward H. Crane highlighted some of the benefits of the Cato plan: "It is easy to understand -- your share of the payroll tax is used to purchase real assets you own; the employer's share helps finance the transition. The '6.2 Percent Solution' creates accounts large enough to make a real difference. And, best of all, the Recognition Bonds immediately create personal accounts that Congress cannot tamper with."
Tort Reform Will Be Part of Economic Forum
"A major focus for President Bush during a White House economic conference this week will be big damages awards in lawsuits," according to the Associated Press.
In "Can Tort Reform and Federalism Coexist?" Cato Institute senior fellow Robert A. Levy and Michael I. Krauss, professor of law at George Mason University, write, "Critics of federal tort reform have usually come from the political left and its allies among the trial lawyers, who favor a state-based system that can be exploited to redistribute income from deep-pocketed corporations to deserving individuals." Levy and Krauss, however, "offer a totally different criticism -- constitutional in origin -- that embraces the need for reform but reaffirms this principle: The existence of a problem, however serious, does not justify federal remedies outside the scope of Congress' enumerated powers."
They argue that "taken together, state substantive reforms and federal procedural reforms can curtail abuses while respecting time-honored notions of dual-sovereignty federalism."
Worry over Iranian Influence in Iraqi Elections
"As election campaigning [in Iraq] formally begins Wednesday among more than 230 parties and political groups that have entered lists of candidates, the question of Iranian influence will weigh heavily," according to the New York Times. "Ghazi al-Yawar, the Sunni Arab sheik who was selected as Iraq's interim president, and King Abdullah of Jordan have both recently sounded warnings."
In "Can Iraq Be Democratic?" Cato senior fellow Patrick Basham argues that "the White House will be gravely disappointed with the result of its effort to establish a stable liberal democracy in Iraq, or any other nation home to a large population of Muslims or Arabs, at least in the short to medium term."
"The building blocks of a modern democratic political culture are not institutional in nature," Basham writes. "The building blocks are not elections, parties, and legislatures. Rather, the building blocks of democracy are supportive cultural values -- the long-term survival of democratic institutions requires a particular political culture."
Wyatt DuBois, editor, wdubois@cato.org