Republicans and the Bush administration are bleeding badly on Social Security from scores of self-inflicted wounds by some members of Congress, as well as low-level staffers and political appointees who can't see beyond their green eyeshades. By insisting that any reform of Social Security involving the creation of personal retirement accounts must be accompanied by benefit cuts, tax increases and/or hikes in the retirement age, these Washington functionaries are draining personal accounts of their vitality, jeopardizing Social Security reform and ultimately endangering the Republican congressional majority.
Tom Davis, R-Va., has gone so far as to announce that the president has a problem getting this through. Furthermore, Davis estimates that roughly 30 House Republicans, including himself, are inclined to oppose Social Security reform - more than enough defections to scuttle legislation and certainly enough to embolden "do-nothing" Democrats to dig in their heels, which is precisely what they are doing.
Rather than John Kerry's defeat enticing some courageous Moynihan Democrats to step to the fore on Social Security, Republican pandering on tax increases, limiting the size of personal accounts, cutting benefits and raising the retirement age have only emboldened Democrats to adopt a head-in-the-sand attitude on Social Security. Word is circulating that Democrats now have visions of turning personal retirement accounts into President Bush's "HillaryCare." Who can blame them? When they smell weakness within Republican ranks, even thoughtful Democrats can't be blamed for calculating they can let the Republicans self-destruct, deprive Bush of the credit for reforming Social Security and come back in four years to take credit themselves.
Sen. Lindsey Graham, R-S.C., says Democratic intransigence on personal accounts means that any personal accounts plan will have to be accompanied by tax increases, but "only on the rich." The Graham approach closely resembles Option No. 2 from the president's Commission to Strengthen Social Security. The Option No. 2 "4 percent" account is a really a "small account" because it has a $1,000 income cap, which makes it a 1-percent account for a worker earning $75,000 - ridiculous.
The latest gaff came from within the administration itself when the chairman of the president's Council of Economic Advisers, Gregory Mankiw, said that benefits scheduled for future generations under current Social Security law are "empty promises." Any personal retirement accounts plan, he implied, would have to be accompanied by future benefit cuts.