The conventional
wisdom in Washington, D.C. is that Social Security is THE untouchable government program.
Talk about reforming it and you could incur the wrath of retirees, a highly active block
of voters.
Yet, in a move thought to border on political suicide,
Texas Governor George W. Bush announced a few months ago that reforming Social Security
would be a major initiative of his presidential campaign.
Bush's move wasn't so crazy. His opponent, Vice President
Al Gore, responded with his own plan. Suddenly Social-Security reform entered the national
debate. Now the questions are twofold: Why did it move from being an untouchable issue to
a touchable one? And, will the discussion end up being empty campaign rhetoric or a
sustained push to fix the system?
Why Did This Become a Topic for
Discussion?
Two reasons: First, this might be the last chance
politicians have to save the system while the pain to the American taxpayer would be
relatively minor.
Second, with Americans feeling more comfortable about
investing in the U.S. equity and capital markets, market-based reforms may have a good
reception.
Indeed, several industrialized nations, including
Australia, the United Kingdom and Chile, have already implemented government-sponsored
retirement plans based on personal accounts.
Further, many polls show Americans like the idea of
investing some or all of their Social-Security money into the stock market.
"The irony is that pension reform based on personal
accounts is presented as something radical" in the U.S., when it already exists
elsewhere, said Andrew Biggs, Social Security analyst with the independent Cato Institute
in Washington, D.C.
Still, the battles will be huge on Capitol Hill. And, the
stakes could be a candidate's political future. Still, Bush seems ready to sacrifice it
all. One campaign observer said Bush advisors have quietly spread talk that the candidate
would be willing to sacrifice a second term if he could successfully reform Social
Security.
Will This Move beyond Rhetoric?
The answer from Washington D.C. is mixed.
Rep. Jim Kolbe, R-Ariz., believes it's now or never.
"This is an issue we can't afford to duck," he said. "We've already lost a
lot of time trying to solve the problems of Social Security."
On the other side of the aisle, Rep. Earl Pomeroy, D-N.D.,
isn't as alarmed about Social Security. "Frankly, with the trust fund being solvent
until 2037 … the threat of insolvency isn't immediate," he said.
He favors the Gore plan and thinks the election discussion
will refortify a commitment to preserve government surpluses for Social Security.
Trent Duffy, spokesman for the House Ways and Means
Committee, isn't confident that Social-Security reform will be passed in the next
Congress. His reasoning is that he doesn't expect either party to have a
substantial-enough majority in the House of Representatives to pass. "I just don't
see a scenario where I see Social-Security reform happening," he said.
But, this much is known: Social Security's troubles are a
major national worry. "If you go back 20 years, five percent of the people in the
country worried about Social Security. Now, it's five percent that aren't worried,"
Biggs said.
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