President Bush's Social Security initiative has gotten off to a shaky start. However, polls indicate that voters are warming up to the idea of personal retirement accounts. It's time for the Bush administration to start making crystal clear the core principles that distinguish its approach on Social Security reform from that of Democrats.
Whereas Bush is selling his reform under the theme of an "ownership society," I would call the Democratic alternative the "plantation society." The "plantation society" is characterized by a wealthy class of owners who want to limit the choices, opportunities and freedom of working-class Americans.
According to public record, one of every three members of the Senate and one out of every four members of the House are millionaires. Despite popular stereotypes of Republicans as the party of the rich and Democrats as the party of the working class, the wealthiest member of the Senate (John Kerry of Massachusetts) and the wealthiest member of the House (Jane Harman of California) are both Democrats. Of the top six wealthiest senators, five are Democrats.
The ownership society has certainly found its way into Congress. But the wealthy Democratic owner class shows little interest in spreading the wealth and opportunity around.
House Democratic leader Nancy Pelosi of California, worth $16.3 million, is an appropriate spokesperson for the plantation caucus. This past week she stood at a press conference with other Democratic leaders stating uncompromising opposition to personal retirement accounts. The Democrats' message: no negotiation on Social Security until "privatization is off the table."
Certainly, Pelosi seems quite comfortable in her ability to manage her own millions. However, the thought of working Americans retaining a few thousand dollars each year of their own earnings to invest in a personal retirement account is so outrageous to her she won't even discuss it. The argument that a private account, ultra-conservatively managed, could at least double the retirement income produced by the current Social Security system doesn't seem to interest Pelosi. Nor does the idea that this would be privately accumulated and owned wealth.
When America's political class debated emancipating slaves, an issue that dampened enthusiasm for the idea was the thought that these slaves could simply walk off the plantation and integrate into the nation and live as free people.
The owner/masters of today's Democratic plantation reject all attempts to roll back government and give working Americans more choice and freedom. The response is the same whether it's personal retirement accounts or choosing where to send your kid to school. Anything reducing government control gets rejected.
Ironically, most personal-retirement-account proposals simply make this option available. But even allowing the option gives too much freedom to working Americans for the Democrats. Apparently, we're all so dumb that not only can't we manage our own money, but we shouldn't even be given a voluntary option to do it.
My elderly mom serves coffee in a local convenience store to earn a few dollars to supplement the pittance she gets from Social Security and the few extra hundred dollars per month she started getting after my dad passed away. He worked all his life. If he could have put all the money he paid in Social Security taxes into a retirement investment account over all those same years, my mom would be in a different situation today.
However, Pelosi wouldn't have wanted my dad to have the option to keep and invest his own money. I'm sure she would have thought that he wasn't as smart and clever as she is and shouldn't be allowed to manage his own money.
The black poverty rate today is double the national average. Black-household wealth is a fourth of the national average. Blacks suffer double jeopardy as a result of the work over the last half-century of welfare-state liberals like Pelosi.
First, Social Security payroll taxes take away the few extra dollars that low-income workers could have otherwise retained to build wealth.
Second, and perhaps even worse, welfare-state liberals have educated a whole generation of blacks that they can't take care of themselves. Skills in areas such as money management may be in deficit today. But they are in deficit because they weren't learned, and they weren't learned because of hanging on the government plantation. When do we let these folks off this plantation so they can finally start learning the essential skills for improving their lives?
Social Security reform, with a crucial central component of personal retirement accounts, is being threatened by elitist Democratic liberals. They preside over a government plantation over which they do not want to relinquish control. It's time to let the slaves free. Transforming taxes into ownership is an important way to do it.