In testimony before Congress and in a subsequent report for AARP, Cavanaugh explained why a system that generally works well for about 3 million government workers would confront all kinds of hellacious logistical problems if it embraced Social Security's 147 million beneficiaries. Examples:

• The current TSP has about 200 telephone counselors (in addition to its automated voice response system) to respond to participant inquiries. Since there would be roughly 50 times as many "clients" under the president's plan, there would be a potential need for more than 10,000 counselors to maintain the same level of service. Many of those counselors, unlike those now at the TSP, would have to speak foreign languages. They also would have to be highly trained because they would be required to provide current market, investment, and transactional information affecting investment decisions.
  
  
• Employers would be required to assume expenses and fiduciary responsibilities akin to what companies that provide 401(k) retirement plans now maintain. But more than 85 percent of businesses with fewer than 100 employees have no retirement plans and don't have the personnel, payroll, or systems staffs to do what employers offering 401(k)s do now.
  
  
• Based on surveys of administrative costs for firms that set up 401(k)s for companies with 10 or fewer employees, the annual cost per worker amounted to more than $300. For an account of $1,000 (the maximum under the president's proposal), a cost of $300 per worker would require more than a 40 percent investment return just to get the fund back to $1,000 at the end of the year.

So privatization would require a whole new government bureaucracy and huge, costly new paperwork burdens on small businesses. How, again, is this a plan that conservatives should like?

Greg Anrig, Jr. is vice president of programs at The Century Foundation.