Bush's Social Security Blues
WASHINGTON -- George W. Bush, who is not prone to confessing
mistakes, has confided to close associates that he committed a
whopper on Social Security. He admitted error in pushing for new
personal accounts while not stressing the repair of the safety
net for seniors. As a result, Republicans returned to Washington
this week from the congressional recess deeply shaken by what
they encountered back home.
Thanks to the orchestrated effort of the AARP and organized labor
even in the most Republican districts, GOP lawmakers encountered
angry opposition to President Bush's plans at town meetings. These
pressure groups have overwhelmed the campaign for personal accounts
by planting fear among 50-something voters. Republicans face a
dilemma: strengthening the safety net means higher taxes and lower
benefits that would make the package unpalatable to members of
Congress from both parties.
For many Republicans, the Bush Social Security bill is beginning
to look like a bridge too far. They would like to abandon what
they see as an impossible quest. However, the president is committed
-- a commitment that now is not limited to personal accounts but
necessarily includes basic revision of how Social Security is
financed and distributed.
Sen. Lindsey Graham, a first-term Republican senator from South
Carolina, has taken the lead in searching for a bill that would
attract a few Democrats who are essential for passage. Three months
ago, he proposed raising above $90,000 the amount of individual
income subject to the Social Security payroll tax in order to
pay "transition costs" for personal accounts. That brought
down the conservative house on Graham for "negotiating with
Many things have happened since then. Bush said that raising
the tax cap is on the table. Graham's package is a work in progress,
including a cut in the payroll tax rate from the current 12.9
percent to 11.9 percent to accompany raising the cap above $90,000.
He would also change the indexing for Social Security benefits
to the inflation rate, replacing the much faster rising wages
-- a 30 percent cut in benefits. All this will be necessary eventually
to save the system without even adding personal accounts. For
now, such personal pain would make possible the pleasure of using
4 percentage points of the payroll tax for personal accounts.
I find some Republicans who denounced Graham three months ago
have moved closer to him. Indeed, some would reduce benefits more
than he does in the upper income brackets. Others would establish
a means test to end benefits for the rich. All this would establish
a graduated Social Security system that might please some Democrats
sufficiently to sell them on personal accounts.
But not if Democratic leaders in Congress, Sen. Harry Reid and
Rep. Nancy Pelosi, have a say. They are determined to block Bush's
proposal, and compromise is not in their lexicon. A party in search
of a theme and purpose, Democrats want to deal the president a
So, the question is whether there will be any Democratic defectors
in the Senate. The most prestigious potential compromiser is Joseph
Lieberman of Connecticut. He could be joined by Thomas Carper
of Delaware and Ben Nelson of Nebraska. On the Senate Finance
Committee, the best bet may be Blanche Lincoln of Arkansas. Also
possible on Finance if the Democratic dam breaks are Max Baucus
of Montana (the committee's ranking Democrat), Kent Conrad of
North Dakota and Ron Widen of Oregon.
None of this seems realistic to many Republicans, stunned by
the organized opposition and minimal support they encountered
in their home districts over the recess. One idea is to forget
about compromising and pass an unadulterated Bush bill in the
House, sending it to certain death in the Senate. Rather than
compromise, some conservative activists would await another election
(2006) and perhaps another presidential election (2008) before
trying Social Security reform.
That sounds like "never" as the probable date for
reaching the longtime free market goal of personal accounts. The
question thus becomes: How important is it for Republicans to
reach that goal of multiplying share owners in America through
means of a partially privatized Social Security system? It cannot
be done without swallowing a lot that is distasteful for conservatives,
but it may be worth it.
2005 Creators Syndicate
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