Sunday, February 06, 2005

The Social Security Strategy

George W. Bush seems to be placing Social Security reform near the top of his agenda. He proclaimed that he had secured political capital after the election and if this is the issue he seeks to pursue, he will need it.

In the past, even the most ardent conservatives have balked when presented with the idea of fundamentally changing the crown jewel of progressives and the most popular social program in the nation's history. The prospect has been widely viewed as political suicide. Supporting privatization risks alienating retirees, future beneficiaries and is perceived as wholly reactionary, a rollback of FDR's New Deal revolution.

Thus begging the question, why Social Security? Why would Bush risk his political momentum on what most view as a loosing hand? typical Dubya fashion, he has a shrewd strategy in place to sell this to the people and the GOP. He actually feels he can turn this devisive issue into a winner and a potential death blow for Democrats. Here is his plan:

1) Remove retired persons from the crux of the debate by ensuring that their benefits will be not be impacted.

Bush has repeatedly noted that under his plan, the current benefits would remain unchanged. The effects of the reform will only be felt in the future. He hopes to neutralize political opposition from senior citizens and powerful organizations such as the AARP.

2) Scare young people by claiming that the system will be completely bankrupt by the time they are eligible to receive benefits.

Despite a consensus opinion among experts to the contrary, Bush continues to assert that Social Security will go bust in the future. This type of fear mongering is a familiar Bush tactic. He seeks to establish a sense of crisis and then exploit that fear to intimidate opponents and justify extreme reforms. If the system is doomed to insolvency, then why not gamble with it a little? Why not cut some guaranteed benefits? They won't be available anyway according to Bush. And when Democrats claim that his figures are wrong he plays the guardian, protecting the American public from deluded politicians who can't see the real dangers that lay ahead.

3) Appeal to a sense of risk taking among young people.

The prior two points are really nothing new. This tactic however could mark the true difference in the way that Bush approaches this issue. Bush is attempting to portray the old school Social Security defenders as behind the times and too rigid in their support of a system that is obviously imperfect. Similarly, he is appealing to young people who are willing to take some risks and take some personal responsibility for their future Social Security benefits. Bush tempts them with claims of invested money accumulating in private accounts. Of course part of this risk is that benefits can no longer be guaranteed. They are largely dependent on the performance of the stock market.

Wasn't the notion of a GUARANTEED social safety net the entire purpose of Social Security to begin with? The need for Social Security stemmed from a recognition that the stock market was subject to busts and that a SEPERATE trust needed to be set up to ensure people basic income after retirement. Bush hopes that young people, removed from the depression era history, will opt to give the stock market another chance.

The problem with this logic, aside from the obvious, is that it fails to account for the doom and gloom projections of the Bush Administration itself. If the economy collapses to such a state that the Social Security system goes "bankrupt", there is no chance that the stock market would be growing at such a rate to save the benefits. In other words, for Social Security to go bankrupt, the economy will have to really suck and if it sucks, your private account won't be worth shit.

Although Democrats have been gun-shy to provide their own solution to a potential Social Security crisis, the solution is really rather simple. Instead of radically restructuring the way the system receives its funds, why not just tap the same capital that the original system was based on? Raising the regressive cap on Social Security taxes would be more than enough to ensure the programs future solvence. As it is now, if you make more than $90,000 a year, you are out of the system. With incomes rising, it seems logical to simply remove that cap. Who suffers? Only people that make enough to bare the burden.

Democrats won't touch the issue because the know that it can be politically toxic. Bush is ignoring this conventional wisdom. Surely there are easier, more politically friendly, items to put at the top of the agenda. Why tackle this one? Perhaps Bush really believes that Social Security is doomed and views privatization as the best route to save it for future generations. More likely, he views it as a means to secure more available capital for investment in big corporations. Maybe it will "trickle down" to us young folks by the time we retire and we won't need Social Security.

Most importantly, Bush likely views this as a way to radically redefine the Republican Party. Give them an inch, they'll take a mile. Give them Social Security, they'll take us back to Herbert Hoover. Conservatives have been trying to reverse many of the gains of progressives for decades, from civil rights to social programs. Bush knows that if the neo-conservative agenda can co-opt the likes of Social Security, they can forge new voting coalitions and discredit past Democratic gains. This is the final prong of his Social Security strategy and it will be relied on to sell this reform to the Republicans in Congress.

Unfortunately, I don't believe that Bush really cares if future generations get their Social Security benefits. If he did, he would not have raided the Social Security surplus and spent it on a war. He wouldn't have pushed for a massive tax cut for the wealthy that could have been used to make Social Security solvent. He also would not be so quick to rule out raising taxes in the future to ensure its solvency. Just as he did with Medicare, Bush is claiming to improve a valued social program with the intent to merely funnel tax payer money to big business.

Luckily, Democrats have a strong opportunity to sap the President of political capital and set a tone of progressive resurgence on the Hill. Social Security is the type of issue that can unite Democrats and split Republicans. Democrats are unlikely to allow a band of neo-conservatives to fiddle and gamble with a defining social program and many Republican's still view Social Security reform as a political lightning rod, much as tax hikes are for Democrats. In the end, I expect the legislation will stall in the Congress and the President will be put on the defensive. But, if Bush is successful, it could signal a true political realignment. Is nothing sacred?


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