Not a crisis, a better deal

Posted: Jan 24, 2005 12:00 AM

Imagine if Paul Revere had made his ride on April 18, 1775, declaring: "The British are coming, the British are coming ... and they will get here sometime between the years 1803 and 1805, depending on events including troop levels at that time in Boston, the next several parliamentary elections and the health of King George." The good folks of New England might have appreciated the warning, but considered Revere's urgency on that particular night a little out of place.

    The Bush White House finds itself in a similar position to this hypothetical Revere in the Social Security debate, declaring a crisis seemingly so far off in the future that people wonder what all the shouting is about. A commonly cited date for Social Security crunch time is 2042 (the problem begins sooner than that, but put that aside for the moment). Economist John Maynard Keynes famously said that in the long run, we are all dead. 2042 is not quite the long run, but a lot of us will still be dead by then, as one Republican congressman noted by way of explaining his opposition to undertaking any Social Security reform whatsoever.

    Any crisis 40 years away will strike most voters as attenuated, a fact Democrats have exploited effectively in the initial Social Security debate. Democrats go too far when they say, in effect, that "Bush lied about Iraq, and he is lying about Social Security." But the administration has been vulnerable to the charge of "false imminence" in both debates.

    President Bush carefully avoided saying Iraq was an "imminent threat," but it was strongly implied, including in the word "pre-emption," which was constantly applied to the war. Countries pre-empt imminent attacks. This is why the distinction made by historian John Lewis Gaddis between Iraq being a war of pre-emption and prevention is so important. A war of prevention is waged to keep -- prevent -- a country from becoming an imminent threat, exactly the case in Iraq.

    By the same token, a Social Security fix now would be undertaken to keep a problem -- a big $10 trillion problem that will get worse each year -- from becoming a full-blown crisis. It would be prevention, not pre-emption. This might seem a niggling distinction, but it matters. Already Bush's critics have been able to score easy points off his statement that on Social Security "the crisis is now."

    There are two other problems with the imminent-crisis rhetoric. First, it emphasizes the pain -- the reductions in benefits or tax increases -- that will have to be part of the plan. Both are unpopular. Second, it forces Bush into an area in which he has no mandate. In both his election victories, Bush talked about making private accounts part of Social Security, not fixing its solvency for all time with benefit reductions. The last time Republicans similarly sprung on voters a far-reaching plan to fiddle with entitlement benefits that they hadn't bothered to mention during an election campaign was in 1995-1996, when they tried to slow the growth of Medicare benefits and paid a dear political price.

    Bush must keep his priorities straight: Private accounts are what he campaigned for, they are relatively popular, and they will create more savers and investors in America, shifting the electorate in a more pro-free-market direction over time. By focusing on the private accounts, Bush will stay on the strongest possible rhetorical ground, offering a better, new deal for younger workers. Any eventual compromise with Congress will have to include some measures to improve Social Security's finances -- if nothing else than to reassure the financial markets --  but it won't have to solve everything in one fell swoop. Who cares if Congress in, say, 2020 has to come back to adjust the program's financing again?

    Bush deserves credit for the sweeping ambition of his problem-solving "transformational" presidency. A spoonful of realism on Social Security will help the transformation along.

 CORRECTION: Guyana is in Latin America, not Africa, as stated in my last column. I regret the error.

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