Stocks, on average, provide a higher rate of return. This is because they're riskier, and the return differential is called the risk premium. Investors demand to be paid higher returns, on average, because of that risk.
Given the way the Bush plan is structured, it's certainly important to calculate the "risk-adjusted returns" the way the CBO does when scoring the plan. The fact that "in the long run stocks do better" isn't much help, given that upon reaching retirement age a large chunk, if not all, of your private account will be mandatorially converted into an annuity. While long run investors can ride out the storm of a bad couple of years on the stock market, the Bush plan doesn't allow for that possibility. Long bear periods do happen. In 1987 the S&P crashed 20% in one day. If that happened on the day when you hit 67, you'd be pretty upset.
