Posted on 03/15/2005 9:08:43 AM PST by neverdem
OP-ED COLUMNIST
At this point there's no better than a one-in-four chance that some form of Social Security reform will be passed this year. There's no sign that Republicans will bend on their insistence on private accounts or Democrats on their opposition. There's no sign that enough Republicans will tolerate tax increases or that enough Democrats will tolerate benefit cuts.
There are no signs that anybody is budging or willing to budge. And so it's time for a provisional obit for Social Security reform - an exercise in cold stock-taking, because when historians look back on this episode they'll see a compendium of everything that is wrong with contemporary politics.
The mistakes that led us to this point came in waves.
Republican blunders: Republicans often argue that Democrats are out of touch with mainstream Americans, but this time it was the Republicans who were trapped in the insulated world of their own think tanks.
Having skimmed decades of private-account proposals, Republicans did not appreciate how unfamiliar this idea would seem to many people. They didn't appreciate how beloved Social Security is, and how much they would have to show they love it, too, before voters would trust them to reform it. In their efforts to create a risk-taking, dynamic society, they didn't appreciate how many people, including conservatives, value security and safety.
Furthermore, Republicans didn't really have a strategy to get their proposals through Congress. They seemed to think that if the president held enough town hall meetings around the country, they could somehow bulldoze the Democrats.
A politically supple group would have done tax reform before Social Security reform. Tax reform is a less partisan issue, and might have set a precedent for compromise.
More experienced negotiators might have put the solvency issue before the personal-accounts issue. That would have created a consensus on the need for change before we got to the divisive issue of how to fix the system.
But Republican leaders have never really developed the skills required for cross-party horse-trading. Today's Republicans emerged in response to the ideological politics of the 1960's and were forged in the anti-political populism of the 1994 revolution. These anti-political creatures of conviction find sticking to orthodoxy easier than the art of compromise.
Democratic blunders: The Democrats are still traumatized by their own losses. They are focused on past defeats, not future opportunities, and interested in revenge, not governing and accomplishment.
When Social Security reform was broached, the party leaders went to the F.D.R. Memorial, as if the glory days of the 1930's were the guideposts for the 21st century. Meanwhile, the party base has grown militant with rage. The Howard Dean hotheads declare that they hate the evil Republicans, making compromise seem like collaborating with Satan. The militants, bloggers and polemicists have waged a relentless pressure campaign on any moderates who might even be thinking of offering constructive ideas.
The party's greatest failures have come in the past few weeks. Sensing the inadequacy of the first Bush approach, many Republicans have floated brave concessions. Several leading Republicans proposed a big payroll tax increase for the upper class and upper-middle class. Senator Robert Bennett suggested progressively indexing benefits to protect the poor and working class from cost-saving steps.
These offers are more progressive than any Republicans have made before or are likely to make again. But the Democrats played the Yasir Arafat role at Camp David. They made no counteroffers. They offered no plan. They just said no.
Instead, many made demagogic speeches about Republican benefit cuts, as if it is possible to fix the system without benefit cuts. Many ginned up the familiar scare tactics designed to frighten the elderly.
If Social Security reform fails - and obviously I hope this obit becomes obsolete - it will be many years before any sort of big entitlement reform will come up again. The parties will keep playing chicken, and we will soon find ourselves catastrophically buried under our own debt.
Oh, yes, there's one more group to be criticized: the American voters. For the past 30 years, Americans have wanted high entitlement spending and low taxes. From the looks of things today, they - or more precisely their children - are going to live with the consequences.
E-mail: dabrooks@nytimes.com
Truer words have never been spoken.
He does have a point.
I disagree. Private accounts are just too annoying. Keep things simple: let people opt-out of social security. Even otherwise radical college-age liberals will comment on how the don't think that social security will be there for them, and that they'd prefer to opt out of the system.
How would you propose that benefits for current retirees be funded if workers were permitted to opt out of paying the Social Security payroll tax?
MAKE SOCIAL SECURITY VOLUNTARY.
MAKE SOCIAL SECURITY VOLUNTARY.
MAKE SOCIAL SECURITY VOLUNTARY.
It's clear, simple, canned for sound bites and meaningful. You don't even have to kick around alternatives. That just muddies the water anyway. You don't even have to use the word 'privatization'. I'd like to see how the democrats would fight this. If the democrats think that SS is a good idea then they should have nothing to fear because no one would opt out of SS. Right? Hehehe. Checkmate.
Suppose that all Treasury notes, as they become due and get paid back to SS, were invested for ten years into the same investment scenarios that would be offered to taxpayers...
Wouldn't this help pay the costs of transition, while serving as an example of putting your money where your mouth is?
Must be true - after all, the NYT is so accurate...
The article doesn't mention the success in Chile:
Chile privatized its Social Security system more than a decade ago, and it works quite well. In a nutshell, everyone in Chile pays 10% of their income (less than the 12.6% we now pay as a Social Security Tax) into their Private Retirement Account (PRA), which is essentially the same as a 401k or an IRA, with a widely diversified investment base. Then they draw the money out when they retire, in monthly payments calculated on their actuarial life expectancy. For the 10% of so of Chileans whose PRAs aren't enough to fully fund their retirement, the government makes up the difference for a baseline minimum Social Security benefit, which is set by statute - and paid from general revenues. There is no separate Social Security tax.
The President clearly spelled out the choices and the NYT is fogging up the message as well as all the pundits and other leftist talking heads. It is so simple - just choice and it has worked well for federal employees for decades - who not for everyone? Well for starters the politicians would not be able to get their greedy fingers on YOUR money, at least not all of it as they can now. They are scared spitless so they muddle up the facts hoping Americans will become so confused they will stay with the status-quo - governmental theiveary!
All you need to know about this is that Brooks is a card-carrying member of the Weekly Standard "Chicken Little Memorial Always Misunderestimate George W. Bush Club." Every time any Bush program has ever hit a snag Kristol et all run out in the streets crying "Bush has failed! Bush has failed! The sky is falling! The sky is falling!"
Everything Bush has ever accomplished, just about, has happened several months after all the Clever People declared it dead. It's a pattern: He lets his opponents run his proposals (or his person) into the ground, lets the Dems rant and rave till people are sick of them, lets the Big Dumb Elephants on the Hill snort and harrumph till they've had their chance to feel important, and then he starts making speeches and talking to people, and gets it done.
It's way too soon to sing the requiem for SS reform.
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