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March 02, 2005

Bush Might Win on Social Security by Losing

When it comes to social security, Bush may have bitten off more than he could chew. Although at the beginning of the year, it appeared that he might be able to take on the third rail of politics, it looks like now he may get burned. Atrios makes the appropriate point:"why would any sane Democrat even think about trying to give him a victory on this issue when there's no chance of a reasonable plan making it out of a conference committee?"

From a short-term political viewpoint, Atrios is entirely right. There is absolutely no point in handing Bush a political win and from a historical viewpoint, this may indeed shape up similarly to Clinton's healthcare debacle. This is a case where Bush's communication skills may come back to haunt him since someone with more rhetorical nuance may be better positioned to sell the issues with social security. However, a complete failure by Bush to make any changes whatsoever should send shivers down the back of any supporter of Social Security. Democrats' positioning on the matter may insure that if they win, social security will eventually be gutted because they will insure no meaningful discussion of social security occurs within the next decade. There does not seem to be a middle ground - give Bush personal accounts while insuring the necessary tax increases or benefit cuts that social security requires so it won't collapse under its own weight.

Democrats have gone to the history book and have used what they learned during HillaryCare to craft their defense. The problem for social security's supporters is that similarly to the resulting political landscape after Hillarycare, if Social Security reform falls by the wayside after this attempt, expect that no meaningful political effort will be exerted on its behalf for at least 2-3 more election cycles (not to mention that no politician will touch Medicare, a program with infinitely more problems, with a 10 foot pole). Bush certainly won't bring it up again and I doubt another Republican president will dare touch the third rail, especially in a first term. A Democratic president will be even more hamstrung since a major part of the Democratic defense is that Social Security is not really in that bad shape and President Bush is simply exagerating and lying about the problems it faces. After all the Democratic rhetoric expended over the last three months, it is difficult to picture the American public suddenly taking a Democrat at his/her word should they turn around again and say Social Security is in crisis and MUST be fixed before it is too late.

That leads this country to the brink of when ss starts to call in its IOUs from other parts of government that can not pay and either drastic benefit cuts, tax increases, or age eligibility changes will have to be made. Social security will no longer appear as a benefit but will increasingly be seen as a burden, especially by a younger generation that feels it is getting the shaft. At that point, even Bush's mild prescriptions will be laughed at as quaint and the changes to social security may make it completely unrecognizable. At that point, my guess is the presecription will be to totally eliminate a large class of beneficiaries which will do far more damage to social security than private accounts as it would become seen as a welfare program and not a universal benefit.

If Karl Rove, being the evil genius that he is, wanted to gut social security, I doubt he could have come up with a better plan than what is shaping up in this fight. Either the Republicans get something they want tacked onto social security (private accounts) or the Democrats successfully defeat Bush and he still wins because social security gets further weakened as no serious attempt to fix its problems occurs for at least the next decade. And not to mention that by taking up social security first, if Bush loses, he has insured that there won't be much stomach by either side for the even larger Medicare battle that must take place.

UPDATE: Of course, I might be completely wrong about nothing happening this year. It could be that the pressure on politicians to do something may be too great as suggested by Alan Greenspan and that both sides will put down their political posturing and come up with a compromise solution.   Of course, that may be wishing for too much.  Even if Bush does not get his private accounts but is able to get Congress to agree on some type of reform, he'll be able to claim the mantle of the "saviour of social security."  I am not sure that is what either side wants - conservatives will not raise taxes (I don't see how any solution can not raise some taxes) and Democrats don't want to see a Republican, especially Bush, credited with saving social security. 

If nothing happens this year, I revert to my previous comments.

On another related point, I have been watching some of these congressional town hall meetings that the press continues to spout about and it is interesting to see how white and how old the meetings are.  Do people really believe that these meetings are "representative?"  My guess is that the AARP movtivation wagon has done a great job of getting its grassroots out and that most younger people, who are already very pessimistic about seeing much from social security, are too busy working their asses off to be able to attend.

UPDATE: The latest Carville strategy memo points to some of what I am talking about.  It notes that more people see Bush favorably as attempting to fix a big problem is social security than they see him as acting irresponsibly, even if they are not for personal savings accounts.  An interesting point that Carville makes hilights what I see as the biggest long term problem for the Democrats in their current approach: "To say there is no problem, simply puts the Democrats out of the conversation for the great majority of the country who want political leaders to secure this very important government retirement program.  Voters are looking for reform, change and new ideas, but Democrats seem stuck in concrete.”   Carville admits that in his polling, a majority of people, even if they disagree on personal retirement accounts, believe that Democrats "don't have any particular ideas around retirement."

10:13 AM in Current Affairs | Permalink

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