by Stephen Moore and Lawrence Hunter President Bush has been heroic in pushing personal investment accounts for Social Security. But he’s still got the wrong marketing strategy. At his press briefing Wednesday, Bush again stated that personal retirement accounts are insufficient to make Social Security permanently solvent. With all due respect, Mr. President, you’re wrong. The chief actuary of Social Security has scored four separate personal-accounts plans as achieving full solvency without tax increases or benefit cuts. The President makes this mistake because he is receiving bad economic and political advice. The misconception that personal accounts are inadequate not only jeopardizes the President’s legacy on Social Security, but also threatens to poison the well for personal retirement accounts for years to come. Let us state the point unequivocally: Personal accounts are the best way to solve the long-term financing crisis of Social Security. The President rightly has observed that there is a solvency crisis looming for Social Security in the near future. He has been persuasive on this point: A solid 71% of Americans agree with him. So does every independent financial analysis–even from the Social Security Administration itself, which concedes that the long-term liability of the system is nearly $10 trillion. Personal Accounts Bring Solvency The worst way to “solve” this crisis is to raise the payroll tax, which would amount to an enormous marginal income-tax-rate hike for middle class workers. No Republican candidates, including Bush, campaigned on payroll tax increases or Social Security benefit cuts in the 2004 campaigns. No one won an election campaigning on either. Indeed, most Republican candidates for Congress ran on the Americans for Tax Reform pledge not to raise taxes and promoted personal accounts as a way to increase retirement prosperity, not diminish it. Raising payroll taxes as part of Social Security reform, including lifting the cap on the maximum taxable income, would cost jobs, burden small business and reverse some of the gains in the hard-fought cuts in marginal income tax rates. History also teaches that higher payroll taxes will fail to solve Social Security’s financial crisis. In 1983, Congress raised the payroll tax and even accompanied the higher taxes with benefit cuts and a hike in the retirement age in an attempt to restore full solvency to Social Security. Yet we face the very same predicament today that Congress faced back then. Indeed, the tax increase simply transformed the Social Security trust fund into an even bigger congressional slush fund, providing more revenues to satisfy Washington’s spending addiction. Social Security surpluses were squandered with nothing to show for them but bigger government and higher taxes. If Congress does nothing else this year, it should, at least, stop the raid on Social Security and dedicate the Social Security surplus–about $90 billion this year–to personal retirement accounts. Congress should go further. With well-designed personal accounts amounting to roughly the employee share of the tax, which we support, workers would earn much higher returns and benefits than Social Security even promises, let alone what it can afford to deliver. Average-income families would be able to accumulate hundreds of thousands of inflation-adjusted dollars by retirement. Thus, sufficiently large personal retirement accounts solve the problem of the pitifully low, below-market returns promised by Social Security to today’s workers, returns that are even negative in many cases. At the same time, contrary to the erroneous advice the President is receiving, personal accounts help solve the financing crisis by reducing future Social Security payments. Properly designed, personal accounts comprising about half the current payroll tax would increase national savings and investment and sharply boost economic growth. Overall, federal revenues would rise, and the accompanying shift of so much of the future retirement-benefit obligations from the old Social Security structure to the personal accounts would solve the long-term Social Security deficit problem. One leading plan, the Ryan-Sununu bill, would actually reduce the entire unfunded liability of Social Security and allow for debt retirement. That’s the plan the President should embrace. Republicans must resist the trap of embracing schemes that ask workers to pay more, work longer and get less. It’s really very simple. There is an irresistible impulse for politicians and the bureaucrats that advise them to propose what works for Washington, not what works for workers. That’s why the President’s aides advise him to focus on “solvency and sustainability” for the “system” rather than “ownership and prosperity” for workers. The President has done his part; he has galvanized the nation to action. It’s now up to Congress to take the baton and run with it. Congress must pass a reform that fulfills the promise of personal retirement accounts: full solvency for Social Security, greater security and higher retirement benefits for workers without higher taxes. Mr. Moore is economics correspondent for HUMAN EVENTS and president of the Free Enterprise Fund. Mr. Hunter is chief economist of the Free Enterprise Fund.