Thursday, February 03, 2005

Social Security is Officially On the Table

Last night President Bush used his State of the Union Address to officially start his campaign to reform Social Security. He’s going to have a tough sell, but he’s apparently willing to make it a high priority issue.

It has long been obvious that Social Security must be reformed – eventually. This is not a new issue. I remember seeing a cover story report in one of the national news magazines about the system’s impending doom back in the late 70s. The trouble is that politicians have shied away from doing anything serious about it, reasoning that some future generation will take care of it when the problem becomes more immediate.

The chief reason for the lack of political backbone to reform Social Security is the politicians’ perceived lack of reward and the very real possibility of punishment. As demonstrated the last election, the majority of actual voters are much closer to the Social Security collection end of the scale than to the high school graduation end.

The AARP voting block can actually vote people out of office, while the younger people that would benefit most from private retirement accounts vote at rates too low to strongly influence elections. That’s why even some Republicans in Congress agree with Representative Rob Simmons (R-Connecticut) when he says, “When does that program go belly up? 2042. I will be dead by then.”

After hearing the President’s speech and the Democratic responses last night, an associate of mine in his mid-50s was sure that the new plan would hang his generation out to dry and only take care of the young and the already retired. Of course, no plan that does that could ever pass. I was surprised that he bought into the head-in-the-sand anti-reform mantras offered by our Democratic leaders, who misrepresented the President’s position and said in effect, “There’s nothing wrong here.”

Shortsighted self interest is not new to politics, of course, and that is why only Band-Aid solutions to the Social Security issue have been applied in the past. But today we have a rare opportunity to actually do something. We have a significant leader that is willing to stand up and spend political capital on starting to truly fix the system.

To pass Social Security reform President Bush is going to have to exercise continuously strong leadership on the issue. His administration has a track record of making strong statements and then going fuzzy when it comes time to do the heavy lifting required to achieve the goal. Perhaps his new management team will function better than his first term team.

Although the President could theoretically get this legislation passed without Democratic support, it is unlikely and it would be unwise. Democratic leadership has made it clear that they intend to obstruct on this issue. However, as demonstrated by Ronald Reagan, if the President does a good enough job on leadership a number of Democrats will eventually read the writing on the wall and will join in.

The question is whether Bush can lead on this issue like Reagan naturally did on many issues. If he pulls it off our children and grandchildren will have some hope of funding a good part of their retirement from Social Security. If he fails we will likely not see anyone seriously grapple with the issue for another generation, and then it may be too late.

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