Insider White House memo to conservative supporter on the Social Security issue hits the WSJ (it lays out the problem with the approach): “If
we borrow $1-2 trillion to cover transition costs for personal savings
accounts and make no changes to wage indexing, we will have borrowed
trillions and will still confront more than $10 trillion in unfunded
liabilities,” the memo says. “This could easily cause an economic chain
reaction: the markets go south, interest rates go up, and the economy
stalls out.”
Interestingly, it seems that Bush is doubling down in a big gamble: “He
cannot afford to fail. It would have repercussions for the rest of his
program, including foreign policy. We can't hand the president a defeat
on his major domestic initiative at a time of war.” [John Robb's Weblog]