In reading Dan Bartlett's pre-SOTU briefing, I am struck by an undernoticed emphasis: that Social Security needs a "permanent" fix. Frankly, Bartlett's right. There are crises confronting Social Security, though nothing real on the financial side.
There is a political crisis. The GOP and George W. Bush want to dismantle the program. They want to cut benefits by almost half, mire the budget in red ink that even Moses couldn't part, and default on the trust fund, breaking the promise America made to workers, families, widows and the disabled two decades ago. We need to ensure that this can't happen, and part of it should entail a "permanent," or legally enforceable, change to the system. The 1983 promise is a covenant that should be left in the hands of the GOP. The American people understand that the crisis is political, not financial. The AFL-CIO polling that has served as the baseline for much of liberal efforts to protect social security prove this overwhelmingly.
How do you give workers that have paid into the trust fund an enforceable claim on their excess payroll taxes? I can't think of an easy solution, but I'm merely an unemployed blogger. My best guess would be the replacement of the special bonds issued to the Trust Fund with a enforceable bond issued to workers that can only be redeemed through annuitization upon retirement. The annuity would be rolled into the scheduled social security benefit, ensuring its financial solvency. Workers should have the choice to forgive social security benefits, not the GOP and its minions.
There is a credibility crisis. The administration has reached new depths in its willingness to mislead the American people. The resevoir of trust that the American people place in the executive branch's administration of foreign affairs seems limitless, but social security is a much shallower well. This is our future, our retirements, the retirements of our mothers and fathers, grandmothers and grandfathers, children and grandchildren. It's a pocketbook issue, and the administration is playing the role of the huckster. Americans don't like hucksters.
There is a moral crisis. The administration and the GOP believe that Social Security is an immoral program, welfare for the elderly. They believe that it is wrong to take care of seniors, families, widows, and the disabled. Instead, they want each to take care of his own, those we care about be damned or be undignified roommates. The Wehner email makes this clear:
For the first time in six decades, the Social Security battle is one we can win -- and in doing so, we can help transform the political and philosophical landscape of the country. We have it within our grasp to move away from dependency on government and toward giving greater power and responsibility to individuals.The reach of this dystopian moral embrace of collective impotence is better shown in Richard Land's criticisms of Jim Wallis:
The most interesting part of the NYT's reporting, though, is the commnetary by Richard Land, of the Southern Baptist Convention, who "argued that Mr. Wallis misunderstood conservative evangelical voters because he conflated the moral issue of alleviating poverty with the practical issue of whether Democratic policies are the way to do it," claiming "that the debate is over, based on the 30-year experiment, about whether big government or free markets work better at producing wealth for everybody."There should be no doubt that the moral position in this debate is to ensure care for everyone, not just those with trust funds and platinum parachutes. Roosevelt believed, in his heart, that government has a moral obligation to serve the people. We control it - we aren't slaves to it.
I put up the There Is No Crisis Social Security banner, but I believe that it is overbroad. There are crises, just no financial crisis. We we'll have to fix them, hopefully permanently.
Update, 6:06 PM EST: Nowhere are the moral stakes made more clear than in Warren Veith's Los Angeles Times article.
If private accounts wouldn't fix Social Security's finances, why bother? The answer, for Bush, appears to be partly economic and partly political. But at its core is an unwavering ideological commitment to personal ownership as an alternative to government assistance, his advisors say.If you clean up the fancy Luntz-provided focus group palaver, you get down to the "tyranny" of social security. My grandmother who gets to enjoy her retirement thanks to social security somehow manages to bear the boot of guaranteed benefits.
"People ought to be encouraged to own something in America," Bush said at Friday's second stop in Little Rock, Ark. "You'll be owning a part of your retirement account. It's actually your money to begin with. It's not the government's money. You're paying it in."
According to several administration allies and adversaries, Bush's bedrock belief in individual ownership as an antidote to collective dependence transcends for him any argument over the severity of Social Security's financial shortfall or the merits of other potential fixes.
"There is a tyranny of the Great Society that afflicts a lot of Americans," said Michael Franc, vice president of the conservative Heritage Foundation and an informal administration advisor. "The solution that is coming from Bush's conservative ideology is to give people some personal ownership and control. He is looking at this as a pivotal moment in what we do with all the promises that were made in the '60s and '70s. We can no longer keep those promises."
If weaning Americans from government assistance improves Social Security's finances and pays big political dividends, all the better, Bush allies say.
"The president just believes personal accounts are good policy in terms of giving people more control, more choice, the ability to pass money on to their kids," said Jeffrey Brown, a University of Illinois finance professor who is advising the administration on Social Security. "The issue of ownership and control would be important even if we were starting off with a system that was relatively balanced, which we're not."
"The Social Security crisis is not that the system is bankrupt in 2042," said Grover Norquist, president of Americans for Tax Reform and an administration confidant. "The crisis is that 25-year-olds get less than a 1% rate of return on their payroll taxes. That crisis is now."Fuckin shameless.
Norquist acknowledged that for some conservative activists, including himself, the ultimate objective was to eventually replace traditional Social Security benefits with a system of individually owned accounts.
"If the left views the purpose of the New Deal as making older people dependent on politicians, then this will in fact undo the New Deal," Norquist said. "But if you view the New Deal as trying to give older people independence and dignity in retirement, then the president's reform provides that."
Some also see personal accounts as a way to constrain government growth. Bush's initiative would require Washington to come up with as much as $2 trillion over several decades to replace the payroll tax revenue diverted into private accounts. Although those "transition costs" eventually would be offset by benefit reductions, the initial effect would be to tighten the government purse strings.
"There is within the current Republican coalition a group of starve-the-beasters who believe that by keeping revenues low and keeping pressure on the budget, one can steadily reduce the size of government," said Henry Aaron, senior fellow at the centrist Brookings Institution.
Conservatives also cite a potential political benefit. Research suggests that support for Republican candidates and policies is higher among the roughly half of American households that own stock. Allowing younger workers to open private investment accounts in Social Security would further expand the pool of shareholders.
"If you can move from a nation where 50% of Americans own stock to a nation where 75% to 80% own stock, you could change political attitudes and the political culture in a way that's more conservative and more pro-Republican," said Stephen Moore, former president of the Club for Growth, who recently founded the advocacy group Free Enterprise Fund.
Update, 10:51 PM EST: Steven Thomma of Knight Ridder has summaries of the 1980 Ferrera/Cato memo and the 1983 Butler and Germanis/Cato memo. It provides some historical context for the underhanded Leninist efforts to undermine Social Security.