by Rod D. Martin
April 4, 2005
Despite an enormously publicized AARP effort to discredit Social Security reform — aided and abetted every reactionary force the left can muster — the good news is that George Bush is winning. The question is whether he’ll take advantage of what he’s won.
Friday’s Opinion Dynamics/Fox News poll tells the story. Despite the thousand mainstream media stories you’ve seen to the contrary, 60 percent of Americans support private accounts. Those most likely to benefit — Americans under 30 — support them the most, by a whopping 76 percent; but the people AARP purports to represent — 56 percent of all Americans over age 55 — prefer them too.
Far from “dead on arrival”, personal control over your own Social Security savings is a winner. Most Americans understand private accounts well: they’ve had IRAs and 401(k)s for a quarter century. They also know Social Security is going bankrupt: in another time, Bill Clinton, Harry Reid and Nancy Pelosi used to tell them so. And handing control back to each individual American — which is to say, taking control out of the hands of the politicians — is, to borrow a phrase, the ultimate lockbox.
The President’s plan, both economically and politically, is a no-brainer.
Except that he doesn’t yet have a plan.
In his State of the Union, the President offered a bold outline; but no formal proposal yet exists. This has complicated matters. People remain confused, not just the public but the donors who could fund the ads required to sell the plan. The President says everything’s on the table, which is fine statesmanship but suboptimal politics: Hillary’s similar strategy on universal health care allowed conservatives to pick apart a million hypotheticals before she ever produced a bill. And with most Americans agreed that Social Security really is in trouble and that private accounts are a good idea, focusing on the solvency crisis — easily cast as decades away — leads Beltway wonks down a dozen tax-hiking rabbit trails.
The President brought one of those on himself, albeit unintentionally. His stated goal is to set aside 4 points of workers’ 12.4 percent Social Security payroll tax for Personal Retirement Accounts. But it turns out that this number doesn’t solve the solvency crisis. Democrats, along with some Republicans skeptical of free markets, have seized on this as an opening to remove private accounts from the plan, which, of course, completely defeats the purpose.
Congressman Paul Ryan (R-WI) and Senator John Sununu (R-NH) have a solution. With bigger private accounts — 6.4 percent — Americans don’t just get more control over their retirement: the solvency crisis goes away too. In fact, the Ryan-Sununu plan puts Social Security in trillion-dollar surplus range by the time the current system would go broke. Benefits could go up significantly even for those few remaining in the government system (i.e., the poor whom liberals fret will “fall through the cracks”) and the entire unfunded liability goes away.
This contravenes the conventional wisdom, including White House Budget Director Josh Bolten’s own testimony about private accounts this February. But the problem was never with the private accounts: the problem was that a President known for Texas-sized plans hasn’t yet dreamed quite expansively enough.
That may be changing. The Social Security Administration’s chief actuary has backed Ryan and Sununu’s numbers, and the White House itself has praised their plan. But they need to do more than just praise it. Every day the President goes without an official plan is a day that the Democrats get to demagogue the issue, attacking phantom “proposals” the President hasn’t made. And while putting “everything” on the table is admirable, opening the door to discussions of payroll tax hikes, benefit cuts and increases in the retirement age as “solutions” muddies the waters and takes everyone’s eyes off the ball.
President Bush has acted heroically in tackling the issue of personal accounts. He has sold Americans on the fact that there’s a crisis: 71% agree. And the people themselves have resisted the left’s anti-market — anti-freedom — arguments quite ably on their own.
Now the President needs to adopt Ryan-Sununu and announce it as his own. In so doing, he’ll at least triple the average monthly retirement check Americans can look forward to. He’ll head off the long-term market decline and recession we face early next decade when the Baby Boomers stop adding to and start withdrawing from their IRAs and 401(k)s. And he’ll unleash an economic boom here at home just as Europe and Japan fall into their own severe pension crises, thus shoring up the American economy at that very moment which might otherwise be the beginning of a new global depression.
But in the short term, by embracing Ryan-Sununu, the President will give himself and his troops something solid to sell, something worth selling, something which could not be more different from the warmed-over statism of the left. It’s time: for him, and for America.