As some of you Social Security fans may already know, Josh Marshall over at Talking Points Memo has labeled Pennslylvania Governor Ed Rendell part of the Fainthearted Faction of Democrats. That is to say, based on an interview with Chris Matthews, Rendell seemed not to have ruled out private accounts as part of Social Security reform. As a PA resident -- and student at Rendell's alma mater -- such a weak stand for Social Security from the Governor was rather distrubing to me.

However, when Rendell came to speak at Penn about leadership last Friday, he seemed to take himself out of the Faction. He made clear his opposition to private accounts, saying that he just admired Bush for taking on a politically sensitive topic. A transcription of the segment of his remarks dealing with Social Security, made by yours truly from my trusty microcassette recorder, follows after the break.

Transcription of Pennsylvania Governor Ed Rendell’s Comments on Social Security. Remarks delivered at the Fox Leadership “Speaker’s Forum,” Houston Hall, University of Pennsylvania, 2/11/05.

[Rendell's remarks on Social Security reform follow comments about the qualities of a leader, and “You” refers to a room filled mostly with college students]

"Now I said I would relate this to a present day example. You know that I’m a Democrat and you know where I was in the last election. But I think, to a limited extent, that President Bush deserves some credit for attacking the Social Security issue. Just stay with what I said. I don’t necessarily agree – I think the plan to do the private accounts is an absolutely silly one. The government, if they want us to invest some of our money, there are other ways. During the 2000 election, Al Gore proposed a plan of tax credits for investment and retirement income and promoted [inaudible] the government was going to patch money invested in long-term retirement income.

There are other ways to do that. The personal investment accounts doesn’t (sic) do a thing to change the potential insolvency of the trust fund by 2042. Plus it adds, even if you believe the administration, it adds three-quarters of a trillion dollars to the national debt, which you’re going to be paying for for the next five to fifteen years when you’re trying to find a mortgage for your house, on your insurance rates, on your credit cards, on your auto loans. You know, it’s going to be a crusher. So I think that’s the wrong way to go, but give him credit for tackling an issue that no political figure has been willing to tackle. We’ve had, in Congress, commissions – John Breaux, Bob Kerrey, John McCain had commissions, and they came up with bipartisan recommendations. And no one, no Democrat, no Republican wanted to touch it, because Social Security is considered a political death warrant if you’re trying to mess with Social Security.

So, George Bush is trying to do something about it, and let’s give him credit for that. And let’s see how he does on the four prong test [refers to description of leadership earlier in his comments]. In most cases the book is still open. I’m not sure he has a clear vision. He clearly wants the private accounts, but he has also talked about that he’s open for reviewing everything, except for one thing that he should review, and that’s removing the cap on payroll taxes. The first 90,000 dollars of your income is subject to the payroll tax; after that it’s not. If you’re Donovan McNabb, you could earn 14 million dollars in salary, but you only pay Social Security payroll taxes on the first 90,000. That doesn’t make a bloody bit of sense, not a bloody bit of sense.

The president has up to now resisted dealing with that because it’s part of the whole mantra that you don’t raise taxes under any circumstances, anywhere, anyhow. But he’s at least open, he says he’s open, to raising the retirement age. You guys are going to have an average life expectancy, if you reach 65, your average life expectancy, my guess, is going to be 100. And you can’t keep paying people retirement income at 65 if they are going to live to 100 on the average. Everybody knows that’s true. I wouldn’t necessarily raise it for people ten years within retirement, but I’d put it in there. I’d put it in there. It had got to happen.

We should means-test Social Security, absolutely means-test Social Security. Should Bill Gates’s father receive a Social Security check from the government? It’s ludicrous!

There was a great man in Philadelphia by the name of Bill Fishman. He started ARA, what is now called Aramark, now the biggest food-service company in the world. I was in Bill Fishman’s office in 1985, when I first ran for governor, trying to get him give me significant help for the race. He had helped me in my races for D.A. But I couldn’t get him to concentrate because the month before he had gotten his first Social Security check, and he sent it back. Although he didn’t take a salary anymore from the business, his dividends and stock options were three million dollars in income a year, and he was worth 300 million dollars. And that was in 1985. The government could make better use of the check. He had just gotten a letter, like fifteen minutes before I got there to see him, returning the check to him saying the government was not allowed to take it back. He was furious, as he should have been. There’s no reason for that.

Social Security, I mean, we think of it as an entitlement, but it shouldn’t be an entitlement. It’s a safety net.

And you know, this argument that people know best how to handle their own money – if that was the case, why would we have ever needed Social Security in the first place? Right? If people were doing such a good job handling their money so they had no nest eggs for retirement, why would we ever have needed Social Security in the first place? Well, there you have it.

So, I’m not sure the president has a clear vision above and beyond the private accounts. But he is attacking a difficult subject, and he is willing to risk political capital on it, at a time when because of the war and other things, he may not have an abundance of political capital to risk. So I give him real credit to that. He is trying to communicate and persuade. Since literally his State of the Union address, he hasn’t been back in Washington. He has been everywhere, including Pennsylvania, trying to sell this issue. The problem is it’s not a clear vision, other than the one thing, and that’s probably the toughest part of all to sell. But he’s got the goal, at least part of it, he’s out there trying to sell, he’s willing to take the heat. The question is, how long is he going to stick with it? And what IOU’s he’s willing to call to get it done? I don’t know, but that’s certainly a good example of leadership, and again, I give him credit because he is trying to lead.

And clearly, we have to do something about Social Security. Is it an immediate crisis? No. Is it going to affect you? Absolutely. Absolutely. And you’re a large part of the American demographic. We should care about what happens to you, even though what happens to you in terms of Social Security isn’t going to affect any of the politicians who are involved with this right now, I think we have a duty and obligation to look at it. Even though it’s not a crisis. It doesn’t even start to produce less money than the system takes in until 2042. And that’s some ways, a long time to go. 2042 is 37 years from now, right?

I remember graduating from college. We graduated on Monday, the alumni parade was on a Saturday. And I remember seeing the class celebrating their 35th reunion. I went, “My God, these people are ancient!” This May I’ll be celebrating my 40th reunion. And before you know it …

So you should be concerned and we should be concerned, certainly for your children. I mean, these are important issues, and I give him credit for tackling them. Nobody wants to tackle issues that don’t have an impact now, particularly difficult issues. So there it is."

So Josh, does this take Eddie out of the Faction?