The Magazine

Yes, There's a Bush Domestic Agenda

And Social Security reform is a major part of it.

Dec 23, 2002, Vol. 8, No. 15 • By FRED BARNES
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THINK PRESIDENT BUSH has put off reforming Social Security until 2005? Not necessarily. Republican congressman Pat Toomey of Pennsylvania, who's eager to enact reform legislation next year, raised the issue with Bush at a White House Christmas party. He was very encouraged by Bush's response. Meanwhile Bush adviser Karl Rove dispatched an aide, Barry Jackson, to give a PowerPoint presentation to Cato Institute reformers on the success in the midterm election of candidates who advocated using Social Security funds for individual investment accounts. And Rove encouraged Cato, which has spearheaded the reform drive, to stage a public forum on Capitol Hill with successful candidates. Cato did just that on December 4 with "The Third Rail is Dead--Social Security and Election 2002," an event featuring Toomey and senator-elect John Sununu of New Hampshire. Also, White House aides have urged members of Congress to step up the discussion of Social Security reform in early 2003.

What these bits of evidence point to is a White House effort to set the stage for overhauling Social Security in 2003 or 2004 and give the president a humongous domestic policy triumph. Bush, however, is wary of getting out in front of the issue now. He told Bob Woodward, author of "Bush At War": "I will seize the opportunity to achieve big goals." But he had to be asked twice at his postelection press conference on November 7 before he would broach Social Security. "I think the Social Security debate is an incredibly important debate," he said. Bush insisted the type of reform he and most Republicans favor should not be labeled partial privatization. "We call them personal savings accounts . . . so that people would have the option, at their choice, to manage their own money." The plan Bush endorsed as a candidate would let workers take a portion of their payroll tax (2 percent of income) and invest it.

For now, the White House prefers to stay in the background and prod congressional reformers into coming up with a consensus plan on Social Security. That won't be easy. GOP representative Jim Kolbe of Arizona says, "Congress never does that. It takes presidential leadership." Bush's own Commission to Strengthen Social Security failed to reach agreement on a single reform scheme earlier this year. Instead, it offered three models. In the House, there are already at least four plans, and the White House is inviting even more. "There's encouragement to let a thousand bills bloom," says Michael Tanner, Cato's Social Security expert. That's putting it kindly. Just agreeing on who should be consulted is proving difficult. Democratic representative Charles Stenholm of Texas says the White House must be involved in the meetings. Others aren't as insistent.

The surprising thing is that the Social Security issue has arisen at all. The soft economy and weak stock market were supposed to have killed the issue, at least temporarily. Then a half-dozen Republican Senate candidates decided to tout privatization of part of Social Security, and all of them won: Sununu, Elizabeth Dole in North Carolina, Lindsey Graham in South Carolina, Jim Talent in Missouri, Saxby Chambliss in Georgia, Norm Coleman in Minnesota. This was a reversal of the 1986 election, when Republicans lost six close Senate races chiefly because of Democratic attacks on Social Security. Democrats mounted a new round of attacks this year, but they drew little response. And despite more than two years of a bad market, public opinion continues to favor private accounts. An exit poll for U.S. Seniors found that 57 percent favor them. Among voters under 35, 72 percent want to invest part of their payroll tax. And support doesn't drop much among those 35-44 (68 percent) and 45-54 (65 percent). Polls by Gallup and John Zogby have found roughly the same level of support.

Another surprise is the emergence of well-financed pressure groups backing reform. One is the Coalition for the Modernization and Protection of America's Social Security, funded by business groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers. Another group, Social Security Choice, recently opened an office in Washington. The libertarian Cato Institute, which has kept the issue alive for two decades, is also a formidable presence in Washington. And suddenly, too, press coverage of the reform drive has become less hostile. In a December 2 editorial, the Washington Post said: "Given all of the other issues that loom ahead, this may be the last chance to talk calmly about Social Security for a long time, and the opportunity shouldn't be missed."

It probably will be if the president takes a pass. Kolbe believes the single most important factor in forging a congressional majority for reform is Bush. In a letter to Bush in November, he, Stenholm, Toomey, GOP representative Nick Smith of Michigan, and Democratic representatives Cal Dooley of California and Alan Boyd of Florida said some members of Congress "don't want to accept the urgent need for reform. . . . Only with your leadership on Social Security will we gain the momentum necessary to begin legislative action early next year." Stenholm says a public role by Bush is crucial to attracting Democratic votes. "We can bring a reasonable number of Democrats if the president will lead," he told me. In the House, the best guess is as many as 25 Democrats and nearly all 229 Republicans would back reform. Putting together a Senate majority would be more dicey.

But nobody said it would be easy, only that letting workers invest part of their payroll tax--and actually own the account--and making Social Security solvent would be a historic achievement. Should Bush pull it off, he'd attain a "big goal" of the sort he relishes (as does Rove). But he'll have to seize the moment--and the moment is now. The time for Bush to start a pro-reform campaign is the State of the Union address on January 28. Tanner of Cato has a simple calculation of whether the president is serious. "If we get a sentence [in the speech], then we may be talking 2005," Tanner said. "If we get a paragraph, we should be looking to the fall." That's fall 2003, and none too soon.

Fred Barnes is executive editor of The Weekly Standard.