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Willisms

« Reform Thursday: Chart Five. | WILLisms.com | Site News: WILLisms.com joins the Social Security For All Blogger's Alliance. »

A Reinvigorated Case For Social Security Reform.

The case for reforming Social Security has begun to sputter, stalling out somewhat for the time being.

Young people, who get much of their news from Comedy Central's The Daily Show and MTV News, are too apathetic to fight for reform, while old people (the group that actually votes) are too susceptible to demagoguery and underhanded rumormongering by groups like AARP. There is a lot of misinformation out there right now, put out by Democrats and their interest groups.

President Bush decided that by stating a few broad principles for reform, he could first win the public over, then get into the nitty-gritty of an actual bill. Unfortunately, with no actual bill on the table, there has been a vacuum effect, in which Democrats like former Michigan State Trooper turned U.S. Representative Bart Stupak, for example (he's just one of many), can create a strawman bill for his constituents, scaring them about "Bush's plan." Another tactic of the Democrats has been to throw up non-sequiturs and red herrings about a potential loss of disability benefits (which would not change at all under any reform proposal out there today), or about raising the retirement age further (which is one of the very things good reform would prevent from happening), or about the government taking the Social Security money out of the mythical "trust fund" and investing it in "Enron," all ideas intended to confuse the muddle the debate.

Meanwhile, squeamish Republicans, even the President himself, have been busy negotiating with themselves.

Democrats have convinced much of the public that "there is no crisis," and even if there is one, it doesn't hit us until 2042 or some other far away number.

Thus, reform has stalled. For now.

But it is by no means dead, as it is entirely necessary for the long-term economic health of the United States. Polls do show that under 10% of Americans believe that Social Security is "not in trouble." Americans are just a little worried about the untrue things they've heard about reform. Nearly 3 out of 5 Americans said they need more information about the reform proposal. A new poll shows that younger voters urgently want Social Security reform, and by large margins (about 2/3 of those 18-29 want reform).

Thus, people are playing a game of wait and see, and in the meantime, reform of Social Security, a program created by Democrats, is being torn apart in the mainstream media, a forum dominated by Democrats. In other words, the game has been played entirely on the Democrats' turf thus far, with the Democrats' own equipment and referees paid off by the Democrats.

If the President and other reformers can produce a concrete proposal that destroys the myths out there today, addressing all the concerns people have about "privatization," explaining more forcefully that the new system would be as safe as the Thrift Savings Plan (TSP) federal employees enjoy today, they can still win over the public. They must, because it is that crucial to the very functioning of American society over the longterm.

The President also needs to give all of those loyal and devoted Bush/Cheney 2004 volunteers, who have remained ready to jump into action, specific and meaningful tasks.

WILLisms.com is confident that Social Security reform will pass. It just needs a reinvigorated case.

The Wall Street Journal starts the process of selling reform to the public anew:

"Part of the problem is that Mr. Bush and his spokesmen have been promoting reform more as a kind of national forced march than as a great new opportunity for individuals to build and control their own retirement nest eggs.

Donning their green eyeshades in the traditional GOP fashion, they've talked about Social Security 'solvency,' 'transition costs,' 'trust funds' and other accounting abstractions, all in all giving reform the appeal of Marine boot camp without the expensive haircut. 'Do your fiscal pushups' will never be enough to transcend the fear-and-loathing thrown up by opponents.

The only political trump that reformers have, and the one the White House has to make its main theme, is ownership. Not just an 'ownership society,' in the good phrase Mr. Bush often uses, but ownership of your own payroll taxes to build your own retirement assets. This is the nub of the entire reform debate, because it gets to the fundamental issue of who controls the money that Americans pay into the Social Security system.

As it stands, millions of Americans still believe in the fiction that their payroll taxes are being squirreled away in a savings account in their name somewhere in the U.S. Treasury. This is largely because politicians of both parties have spread this fantasy over the years, the better to be able to continue to spend that loot themselves to buy votes for the next election. The undeniable truth is that Mr. Bush's reform is the only idea on the table that would create such accounts, complete with ownership rights written into law.

Americans need to understand that as of now they have no such property right. While politicians have made promises to pay future benefits at gradually rising levels, the Supreme Court's 1960 Fleming v. Nestor decision makes clear that such promises are not an individual asset and that the taxes people pay today guarantee nothing at all down the road....

Another potent ownership theme is the right to pass savings on to one's heirs in a way that workers now cannot. An unmarried American who has worked for 40 years but dies tomorrow at age 60 will lose every dime of payroll tax he has paid over his entire career. A non-working spouse would receive a portion of her late husband's Social Security benefits, but if she dies early their children get nothing. With a personal account, a parent's payroll tax contributions would become part of an estate and could be passed along to children.

Related to this ownership issue is how large these personal accounts are going to be. The Administration's proposal to limit the accounts to no more than four percentage points of the 12.4% payroll levy strikes us as too miserly. Senate Finance Committee Chairman Chuck Grassley is even more ungenerous, talking about two-percentage points or less.

Lower-wage workers in particular need to be offered the financial attraction of larger accounts, which would allow them to build up assets more quickly and in a way that won't seem trivial. They also need to feel their accounts will be large enough not to be eaten up by administrative expenses. The main political point is that Americans aren't going to overcome their normal skepticism toward change unless they come to believe that they themselves will be able to build large personal nest eggs. The larger the accounts, the better.

Only 30 days from the State of the Union address is too soon for Republicans to abandon the President's top second-term priority. But our sense so far is that many Americans are getting lost in the debate over federal accounting and solvency details. Reformers need to make clear that the main issue is who will own the payroll taxes that workers contribute to Social Security: The workers themselves, or politicians."

Ultimately, the debate must not get bogged down in minutiae. It has to be about ideas. And senior citizens must realize that the reform will be entirely optional, and nothing about their precious Social Security will ever change for them. When the debate is framed in terms of providing people more options, more personal choice (yet giving people only safe options, so they don't "lose their money in Vegas"), when people realize the reform would keep the safety net for our elderly intact, and indeed expand wealth and quality of life, the reform proposals will pick up steam.

The largest advantage reformers have right now is that the facts are on their side. Sure, they have been mangled and distorted so far, but if reformers embark on a 5-or-6-week-long process of educating the public, dispelling the erroneous Democrat-floated myths, there is no way the American people, faced with the facts, cannot support reform of Social Security. No reform is a lose-lose proposition, while reforming it (the right way, not reform for its own sake) is a win-win.

UPDATE:
Patrick Ruffini has the gameplan, and the argument that "Personal Accounts: Victory Is Within Reach," at his blog:

"Is Social Security a problem? Does it need to be fixed?

Well, according to a Gallup poll in February, the answer is a resounding yes. 72% believe Social Security is in a 'crisis' or is facing 'major problems.' 64% think the program will be bankrupt by 2042.

And Newsweek finds that 65% of Americans believe Social Security is in a 'funding crisis.' Looks like the Left picked the wrong talking point."

And one last thing:
While the Social Security debate is down-right frustrating, when personal accounts are achieved, it will be amazingly satisfying. Politically, it is almost better than Democrats are fighting this so furiously, because their disingenuous opposition to such a great idea will be remembered in the years to come. Meanwhile, President Bush and the GOP will get even that much more credit for overcoming such stoic resistance.

UPDATE 2:
Joining this post with the Outside The Beltway Traffic Jam.

Posted by Will Franklin · 3 March 2005 10:24 AM

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