President Bush’s Social Security investment accounts plan has sparked a lot of debate among Republicans, and the Democrats’ news release machine hasn’t let any doubt or disagreement go unnoticed.
Less noticed, though, has been the debate in the Democratic Party and among some of its traditional allies over how best to respond to this issue. There are doubts, and criticisms, too, about how Democratic leaders have handled this issue politically, and palpable fears that if their party does not fully acknowledge Social Security’s future insolvency and come up with a saleable solution, it will pay a painful political price for their obstructionism in the next election.
At the top of the list of Democratic complaints is Senate Minority Leader Harry Reid’s head-in-the-sand insistence that Social Security is just fine for decades to come. Not only does every poll show that most Americans do not believe this, Social Security’s latest trustees’ report says the system will begin running out of money sooner than has been forecast.
Earlier this year, Reid, backed by the party’s leadership, declared that “Social Security is just fine for the next 50 years.” When the trustees, a nonpartisan body that monitors the system’s finances, said last month that Social Security will begin paying out more in benefits than it receives in taxes in 13 years, and will go broke in 2041, Reid flatly dismissed its finding as nonsense.
“Today’s report confirms that the so-called Social Security crisis exists in only one place: the minds of Republicans,” he said. “In reality, the program is on solid ground for decades to come.”
Reid’s refusal to accept the warnings of Social Security’s professional actuaries was too much even for The Washington Post, which slammed him. “One can debate the merits of creating personal accounts in Social Security, but not the case for fixing the program’s solvency problems,” the Post said in an editorial.
“The senator’s desire to score political points is understandable. His willingness to do so by implying that Social Security is healthy is not,” the Post said.
A further problem for many Democrats is their party’s failure to come up with a fix-it plan of their own. That position, they say, is politically untenable.
“Just saying ‘no’ to Bush may appeal to paleoliberals who are in denial about the need to modernize the 70-year-old retirement program. But simple rejectionism is a loser for Democrats, substantively and politically,” said Will Marshall of the Democratic Leadership Council.
Democratic advisers like Harold Ickes, the deputy chief of staff in the Clinton White House, acknowledge that the Democrats’ attack strategy has worked fine up until now — raising doubts about Bush’s plan and staying on the offensive. But at some point, he says, they’re going to have to come to the table and lay out a plan of their own.
“I think the country thinks there’s a problem (and) something has to be done to fix it,” he told me last week. “At some point the Democrats are going to have to come up with a proposal, but it’s a question of timing. At some point they will have to come with something.”
Similarly, Democratic allies over at the Brookings Institution, where the Democrats’ so-called “shadow government” sits when they are out of power, say that something must be done to fix the financing system, and the earlier, the better.
Brookings economist Gary Burtless, for one, thinks that a combination of benefit reductions and tax increases “are going to be necessary to make the program solvent. Doing this sooner rather than later is good because it will provide workers in the future a more accurate estimate of what their benefits will be,” he told me.
Benefit cuts are out of the question for the Democrats, though not tax hikes, which are likely to be part of any plan they could put forth. Meanwhile, there is behind-the-scenes talk in Democratic circles that tentative work has already begun on a fix-it plan that could be offered later this year.
But Democratic greybeards like Ickes caution that their party should be very careful of Bush’s strategy and the very likely possibility that he could cut a deal at the last minute and declare victory.
“They are very cagey over at the White House. Bush has left himself a lot of latitude,” Ickes told me. Could Bush get a bill out of Congress? “A deal is always a possibility,” he replies.
In the end, policymaking questions aside, he sees this as a calculated political battle for a larger share of younger voters who like Bush’s plan.
“I think it is completely a political fight. Bush and Karl Rove are trying to supplant the Democratic Party and the Democrats in the minds of workers under 45 years old and have the Republican Party seen as having reconfigured old age retirement security,” he said.
In sheer political terms, that is exactly what this fight is all about, and Harry Reid knows it.