And Now, Something Completely Different

BushCheney recently conceded that his proposal for private retirement accounts for Social Security will not address the financial issues of that program. Previous to this admission (see William Saletan in Slate ), personal accounts were part of the solution to the Dire Crisis. Now the Washington Post reports that persons choosing to create a personal account may only keep part of their earnings that exceed three percent, the remainder is retained by the government to augment a guaranteed Social Security benefit that would be reduced by a still-undetermined amount from the currently promised benefit.

(Update: A new Washington Post article reports that the story cited above incorrectly understated the amount a worker could earn in a personal account. However, the original story is still correct in stating that workers would not retain all of the earnings and that the benefit structure is less private than commonly understood.)

A worker whose personal account doesn’t beat the inflation rate has little beyond a pile of cash that will vary considerably depending on the market and the worker’s retirement horizon. reduced Social Security benefit. Benefits are far less certain. This doesn’t sound like an improvement in the nation’s retirement security program. And, we’ve just learned that personal accounts are not a solution to Social Security’s financial problems. So...why is BushCheney pushing this policy?

Some analysts describe BushCheney’s Social Security proposals as the culmination of an ideological battle that began in the Franklin Roosevelt Administration: BushCheney attempting to redeem the Republican Party from its greatest failure. True, traditional Republicans have always hated Social Security (even as many of them collected their benefits). But that hatred is part of the greater hostility to government expressed by Grover Norquist of Americans for Tax Justice and other Republican ideologues. What this tells me is that BushCheney’s plans for Social Security are a convenient battle in the ongoing war against government’s ability to restrain the actions of private capital and private interests on behalf of the larger community.

This battle is one that has been long planned. One of the justifications for the Social Security “crisis” is that benefits exceed revenues after 2018. When analysts point out that the system also holds Treasury bonds sufficient to finance benefits 20 to 30 years beyond 2018, Republicans are now saying that those bonds are “worthless IOU’s,” “accounting devices,” that redeeming these bonds would cause disruptive, disastrous tax increases. In fact, these bonds are the time bomb planted by the Grover Norquists of the Republican Party during Reagan-Bush I years. Surplus Social Security funds were used to minimize the deficits accumulated in those years. Now that the time is coming to repay those debts, the Grover Norquists are hoping that government will be hopelessly discredited and weaked. At that point, Norquist can, as he has famously stated, “strangle” what little remains of the common weal. Maybe that’s why Reagan and Bush I were willing to sign tax increases for Social Security.

No other explanation for BushCheney’s social security proposal makes sense. Why else would they take on a huge political fight for a policy that does not address the problem and does not provide the benefits they promise? They must be true believers.

Whatever the cause, the results will be at America’s expense. One of the few kernels of truth in the current discussion about Social Security is that the system faces financial challenges arising from changing demographics and lifestyles. The changing world economy and the growing dependence of the US on foreign investors also affect how this nation can promote economic security for all citizens during and after their working years. Yet no one is debating these critical issues. Instead, BushCheney’s proposal has sucked all the oxygen from the debate. It’s the 800 pound gorilla that monopolizes all attention.

This non-debate is an opportunity for Democrats. More than just opposing BushCheney on Social Security, the Democrats should propose alternatives that present a more humane view of retirement security, of which Social Security is an important part, along with private savings and investment. The Democratic view should present retirement security in the context of lifetime economic security. (And, no, I am not talking about a super welfare state that seeks to eliminate all risk and provide guarantees. I am talking about public policy to promote and encourage opportunity, minimize economic discrimination and provide a reasonably fair economy that enables workers to meet their own and their families’ essential needs.) Fighting BushCheney’s flawed proposals doesn’t seem very risky when based on a genuine concern for economic justice. It’s called fighting for the common good.