GOP Senators Reconsider Personal Social Security Accounts

The Democratic Party seems to be on the verge of a success. Having dug in their heels and screamed, "No" when the president suggested fixing Social Security's alleged problems with personal savings accounts, the Democrats in the Senate have not broken ranks despite the White House launching a 60-day, full-court press. Now, GOP Senators are considering ditching the personal accounts in exchange for some kind of bipartisan bill the president can sign and pretend he wanted. That is what an opposition party is supposed to do -- oppose.

The White House, of course, made a silly mistake when it proposed the idea of fixing Social Security. The program has been called the "third-rail" of American politics for a reason -- those who touch it get hurt. No reform or change is possible if it even looks like someone will lose out. That was FDR's genius in establishing a system that didn't exclude the well-off. He knew that their votes would keep the program alive only so long as they got a check out of it all. And the Bush White House proved its ideological addiction superior to its political acumen in trying to alter Social Security without creating the illusion of a "win-win" situation; for example, expanding existing 401(K) and IRA plans to allow some sort of tax deduction against increased payroll taxes. In other words, raise taxes $1,000 a year on the average worker, but allow an offsetting tax credit for anyone who diverted that money to private plans. Instead, the White House ran right at the third-rail.

What drives much of the Cato Institute's supporters in the administration is a hatred for any transfer of wealth and income among the American population that is not market-driven. Social Security is just that, today's workers paying today's pensioners in exchange for the same treatment when they get old enough. And it is a horribly flawed system since the demographics run against it. There are fewer workers supporting the retirees than there used to be -- although there are more workers in the higher income range than before, so the ratio is not a perfect measure.

By the same token, Social Security has had an astonishing effect on the situation of old folks. Before the New Deal, the elder were the poorest segment of American society. Now, they are the richest. Not all of that is directly attributable to the program, but enough of it is to make it worth keeping. The market-knows-best capitalists are wrong; after a lifetime of work, every American is entitled to some kind of support. If citizenship only means votes and jury duty, no one needs it. But being a part of a res publica, the public thing, entails a web of duties and benefits. Not least of which is daily bread. To suggest that older Americans should starve in the street because they mismanaged their incomes in their youth is simply unpatriotic. Being an American should be worth more than that.

And the Democrats knew that the onslaught from the right either had to be stopped, or they would be irrelevant. Having lost the White House, both houses of congress, most state governorships and most state legislatures, they are in danger of becoming a minority party. Defending Social Security, for them, was a matter of life or death. All things considered, the GOP should take whatever it can get from the Democrats, declare victory, and go back to the successfully strategy of splitting the Democrats with wedge issues like immigration. Much more of this, and the second Bush administration will be a lame duck sooner rather than later.


© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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