WASHINGTON -- Last Wednesday Rep. Paul Ryan of Wisconsin entered a Republican Study Committee meeting, including the most aggressively conservative House members, with important news. Ryan reported that Rep. Bill Thomas of California, the powerful, secretive chairman of the House Ways and Means Committee, had agreed this year's Social Security reform should contain neither tax increases nor benefit cuts.
That evoked a sigh of relief among Republicans who have -- without much help from the Bush Administration -- come up with a Social Security plan that establishes personal accounts and ends siphoning payroll tax revenue into general use by the government. Hopes of getting this reform through the House on a party-line vote would be doomed by provisions to raise taxes or cut benefits, as bundles of Republican members would fall away.
Beyond Social Security, Republicans have relearned an old lesson: They are better off standing on principle instead of inflicting pain on themselves. That argument was won in 1981 by Jack Kemp as a member of the House Republican leadership guiding the Reagan tax cut through Congress. Kemp, who celebrated his 70th birthday last Wednesday, is in the background 24 years later staving off the party's pro-pain brigade.
Thomas, who likes his cards hidden and his options open, would not confirm to me what Ryan reported him saying. "I don't like to shut doors," said the chairman. While the White House wants to cut benefits by revising the indexing of their growth, the president's agents back the House Republican plan as "a first step."
Two innovative Republican senators -- Lindsey Graham of South Carolina and Robert Bennett of Utah -- attempted to attract filibuster-breaking Democrats by adding pain to the reform package. Graham would raise taxes on top incomes, and Bennett would reduce benefits to the disadvantage of the rich. No Democrats climbed aboard.
Graham reacted with a 2.9 percent additional payroll tax on upper incomes that more than wipes out the Bush tax cut. Bennett reacted by completely eliminating personal accounts from his plan. Still no Democrats joined them, though these measures immediately alienated Republicans.
The experience of the two senators ratified Kemp's plea to Republicans not to negotiate with themselves but to wait for a Democratic offer. The Kemp model is embodied in the current Republican proposal. It was drafted by Lawrence Hunter, former chief economist at the U.S. Chamber of Commerce and Kemp's longtime associate (currently at the Free Enterprise Fund).
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