Democrats demagogue Social Security
7/28/2001 12:00:00 AM - David Limbaugh
Democrats market themselves as the party of the common man, but actions (and inactions) speak louder than words.
This week, President Bush's bipartisan Social Security commission (eight Democrats and eight Republicans) issued its preliminary findings confirming that the system is in dire straits and will need a major overhaul, likely including partial privatization, to survive into the foreseeable future.
Adding insult to injury, the report said the system was particularly unfair to minorities because their life expectancy is lower and they are unable to avail themselves of proportionate benefits. This didn't sit well with Democrats. How dare a mere bipartisan commission presume to encroach on the Democrats' compassion monopoly?
Before the ink was dry on the report, the Democratic leadership went ballistic. (The rapidity of their response was reminiscent of David Kendall's rebuttal to one of Ken Starr's reports that was actually released before the report itself.)
Sen. Daschle and Congressman Gephardt rushed to the airwaves to condemn the report as presenting "a biased, misleading picture." According to these self-styled Robin Hoods, the report promotes a privatization plan that would cut benefits and destroy the Social Security system.
Gephardt, himself a virtuoso of scaremongering politics, had the abject audacity to assert that the commission was "trying to undermine public confidence in Social Security and scare people into thinking we have no choice but to cut benefits."
At least that's what Gephardt said this week. But the Washington Times' Donald Lambro reports that in 1998, Gephardt and other Democrats were singing from a different songbook. Gephardt then said that Congress needed "to shore up the financial structure of Social Security," and that individual, private Social Security Retirement investment accounts "can be part of the answer."
Despite what they said then, the Democrats are morbidly fearful of any restructuring of Social Security involving private accounts. How can you explain their opposition to privatization when it will almost surely result in greater returns and thus enhance the system's solvency? Easy.
Under current law, workers and retirees have no legal ownership over their benefits; merely a political promise that can be revoked at any time. Partial privatization will invest workers with a degree of ownership and security. Hallelujah! But Democrats aren't joining in the chorus, because worker ownership means less government dependency and a threat to their cinch lock on the minority vote.
I'm not exaggerating. The Democratic leadership can't maintain with a straight face that we don't have an approaching crisis. The problem is largely a result of two factors, the original structure of the Social Security system and changing demographics.
Since Social Security's inception, its benefits have been generated by the payroll tax. These monies were not invested in a trust fund and earmarked for the benefit of the individual taxpayers funding it. Rather, they were transferred to retirees and disability recipients (and diverted into the general revenue fund) without ever residing in a trust account.
This system worked smoothly for years because there were many more workers than benefit recipients to support it. But now, people are living longer, and birth rates have declined drastically. In 1940, the ratio of workers to retirees was 42 to 1; in 1960 it was 5 to 1; presently it is 3 to 1, and soon it will be 2 to 1.
In 2016, payroll tax revenues will fall short of Social Security benefit payments for the first time. Democrats object that benefits can be funded with interest on government bonds until 2038. Big deal! In the scheme of things a few decades make little difference.
The point is that the commission concludes that for the system to remain solvent without major restructuring there will need to be "either painful tax increases, significant benefit cuts or astronomical levels of borrowing." Which do Gephardt and Daschle prefer?
None of the above, because they don't want this problem solved by a Republican president, even with the blessing of a bipartisan commission co-chaired by Democrat icon Daniel Patrick Moynihan.
In the past we've done nothing to solve the problem, but have only applied Band-Aids to cover its symptoms. That's because until now, politicians have lacked the courage to take on entitlements. President Bush is taking action, in fulfillment of his campaign promise.
For the Democratic leadership, on the other hand, this debate is being driven not by the quest for solutions, but by raw calculations of political power. Some things never change.