GOP Running from Social Security Reform?

Preparing for the latest round of Social Security scare tactics, Republicans are planning a pre-emptive strike-—by shooting themselves before Democrats do. In a strategy that must have been cooked up in a parallel universe, many in the GOP believe that the best approach to Social Security is to run from our popular President who actually campaigned on personal account-based reform. Many top Republicans on Capitol Hill are floating the idea of a resolution to oppose “privatization” of Social Security. The supposed logic is that once a GOP member votes for the resolution, a Democratic challenger cannot legally run ads claiming the Congressman supports “privatization.” Assuming for the moment that the GOP ploy might actually work on a legal level—-which is a far-fetched assumption, at best—-actively undermining one of the centerpieces of President Bush’s domestic agenda might not be the wisest move. If Republicans do take up Social Security reform in 2003 or 2005, as must be the case if the retirement program is to be saved, then how can they turn around and attempt to create personal accounts with a straight face? Democrats would beat the GOP bloody. In fairness to the Republicans, they want to eliminate the word “privatization” from the debate, and there is a legitimate case to be made for that. Jim Martin, head of the 60 Plus Association, has for years promoted use of the word “personalization,” which, in fact, more precisely describes the nature of Bush’s reform outline. Personal-account based reform of Social Security is centered around handing control of retirement security to individuals, at least on a limited level. Allowing people to divert 2-5% of their income away from payroll taxes and into accounts that build and create wealth is enormously powerful when clearly explained. But the GOP’s goofy idea for a resolution distancing itself from “privatization” would do little more than muddy the waters for years to come. In a single vote, Republicans likely would eradicate years and years of tireless work by reform advocates, who have painstakingly educated the public on the value of incorporating personal accounts into Social Security. Headlines would undoubtedly blare, “GOP Bashes Bush on Social Security.” Not exactly the “united front” message Republicans desire. If Republicans truly want to frame the debate on Social Security reform, they should listen to the leading advocate for personal accounts, Rep. Jim DeMint (R-SC), who warns that the “misguided” proposed resolution “would tell voters that we are running from the President.” DeMint’s campaign advice? “We need to challenge the Democrats, and ask them what they’re going to do, and why they oppose allowing workers to create wealth.” DeMint’s strategy will become a lot easier to implement when armed with the results of a forthcoming report from the Heritage Foundation. The study, nearly a year in the making, pushes the debate away from concepts only an accountant could love like trust fund solvency and rate of return and onto where it really belongs: wealth creation. Bickering over accounting details is not only profoundly boring, but also a way for competing projections to essentially cancel each other out in the minds of voters. Arguing for the ability of individuals to grow a nest egg to provide for a comfortable retirement, however, will not get lost in a sea of numbers and estimates. But looking at the numbers for a moment is impressive, to say the least. According to the Heritage report, a 30-year-old Hispanic married working couple, earning less than a combined $50,000, would accumulate an inflation-adjusted $109,000 in a retirement account, above and beyond currently promised benefits. That’s right: that couple, with only 4-5% of income diverted to an account, would make everything promised in today’s broken system, in addition to racking up a six-figure nest egg. Talk about a message worth repeating. The remarkable thing about the Heritage study is that it focuses exclusively on low- and middle-income workers under a personal account program. Everyone-—even staunch opponents of reform-—agrees that relatively well-off people would fare well with personal accounts. The Heritage report provides mounds of evidence to show that even minimum wage earners stand to gain from Social Security personalization. In a nation swimming in debt, the opportunity to sock away extra cash for the golden years could prove enormously popular. We already know that people back personalization, because even with Al Gore’s constant demagoguery, three-fourths of voters in 2000 supported Bush’s call for personal accounts. Yet in the face of favorable exit polls, not to mention solid research demonstrating the strength of a personalized system and Bush’s own popularity, some Republicans want to run for cover rather than engage in an eminently winnable debate. Fortunately, several highly placed staffers in the GOP Congressional leadership believe that the proposed resolution will not see the light of day, but the possibility remains. Let’s hope that Republicans listen to President Bush, Rep. DeMint, Heritage Foundation, or the voters—-anything but their own instincts.