Moynihan had been dismayed by the 1996 welfare reform legislation, which he strenuously opposed but a majority of Democratic senators supported. The core of that legislation was repeal of a portion of the 1935 act establishing Social Security. The repealed portion -- Aid to Families with Dependent Children, a welfare entitlement without a time limit -- was, Moynihan said, ``the oldest feature of the 1935 bill.'' By it, the federal government took over from states the responsibility for widows' pensions. ``Do not doubt,'' he warned, ``that Social Security itself will be next,'' that repeal of AFDC would be ``the first step in dismantling the social contract of the 1930s, in which we undertook the care of the elderly, the unemployed, the children.''
Moynihan favored personal retirement accounts for a reason unrelated to Social Security solvency -- for distributive justice, to provide an estate ``for doormen as well as those living in the duplexes above.'' In today's parlance, Moynihan did not advocate the ``carve out'' accounts favored by President Bush which would be financed by a portion of the individual's Social Security payroll tax. Rather, Moynihan and Richard Parsons -- now CEO of Time-Warner; in 2001 co-chair with Moynihan of President Bush's Commission to Strengthen Social Security -- suggested ``add-on'' accounts:
``These accounts could be financed by the individual worker voluntarily adding 1 percent of his pay on top of the present 6.2 percent employee share of the Social Security payroll tax. The federal government could match the employee's contribution with a matching 1 percent of salary, drawn from general revenues.''
Former Sen. Bob Kerrey, the Nebraska Democrat who worked closely with Moynihan concerning Social Security, and David Podoff, an economist who advised Moynihan on Social Security and other economic and budget issues, stress that Moynihan's recommendation of general revenues was made when surpluses were projected ``as far as the eye could see.''
Times change, and we see how far the eye can see. Which is a lesson for everyone debating ``permanent'' fixes of Social Security based on economic and demographic projections for the next 75 years.
Whatever is done, or if nothing is done, to reform Social Security, it will be increasingly perceived as a welfare program, important primarily for the least self-sufficient minority. And the benefits it promised in 1994 will not be there when those young clerks who came to Moynihan's desk retire.