The Magazine

A Social Security Quagmire?

From the May 2, 2005 issue: Here's an exit strategy for Bush.

May 2, 2005, Vol. 10, No. 31 • By FRED BARNES
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

PRESIDENT BUSH NEEDS AN EXIT strategy on Social Security. With luck, he may never have to use it. There's still a chance a sweeping reform bill will pass this year. But despite Bush's valiant efforts to sell Congress and the nation on the idea of modernizing Social Security, the prospects are dim. History will surely vindicate Bush for trying to solve a serious national problem before it becomes a staggering mess. What's required now, however, is that he be ready to accept defeat in a manner that saves Republicans from losses in the 2006 election and allows him to pursue the rest of his agenda effectively.

The president has campaigned for reform with little help from congressional Republicans and in the face of demagogic hostility from Democrats. He raised public awareness of the financial abyss Social Security is falling into and the promise of personal retirement accounts. But that hasn't been enough to stir strong national support--quite the contrary. As Bush himself wrote in his 1999 campaign book, A Charge To Keep, "It's hard to win votes for massive reform unless there is a crisis." With Social Security, the crisis arrives in 2017 when the system goes into the red. That's at least two presidencies away.

With only one of the 44 Democratic senators willing to cooperate on Social Security, it's hard to see how a reform measure can pass. This is particularly true since none of the Democrats faces pressure at home to work with the president on the issue. Instead, Democrats have been able to oppose Bush's reform drive, offer no alternative, and do so with impunity. Many congressional Republicans are understandably leery of embracing the issue this year.

Meanwhile, Bush's focus on Social Security reform has exacted a political cost. The president's foreign policy has become stunningly successful and the economy is strong and growing despite soaring gas prices and a shaky stock market. Yet his job performance rating in nearly every poll is 50 percent or less. What's the reason? It's certainly not Bush's limited involvement in the Terri Schiavo case. And gas prices have been stuck at about $2.00 a gallon for only a few weeks. No, it must be Social Security.

If Bush is forced to accept defeat on Social Security, it's important he do it the right way. If he's petulant, it will only make things worse. And if he says the fight isn't over yet and he's going to try again in the next Congress to push through a reform measure, it will only make life easier for Democrats. They've become completely reactionary and have nothing to campaign on in 2006. Keeping Social Security reform alive would give them an issue to run on--or rather against.

But Bush can deny them that issue with the right exit strategy. He could say he tried his best to alert Americans to the coming crisis in Social Security, and that Democrats not only opposed him in the most partisan and irresponsible fashion possible but failed to present a plan of their own for modernizing the system. Sadly, he could add, the matter must now be left to future presidents and Congresses.

This approach has several advantages. It would spare Republicans a 2006 campaign dominated by Social Security. Most House Republicans would rather run on other issues--taxes, gay marriage, national security, judges--which are more likely to help them avoid the usual fate of a party with a president in his sixth year in office. The average numbers of seats lost by a president's party in the sixth year of his administration are, roughly, 28 in the House and 7 in the Senate.

It would also ease the strain that Bush's emphasis on Social Security has put on the conservative red states. The population of these states tends to be older and poorer than that of the liberal blue states. And it's been among lower income and older Americans that Bush's reform pitch has especially failed to catch on.

Most important, Bush could turn to issues with a brighter future. Foremost among them would be tax reform and making his already-enacted tax cuts permanent. The president's tax reform commission will issue a recommendation for radically overhauling the tax code. That could be the basis for a powerful campaign issue for Republicans, unless it were overshadowed by Social Security.

Bush campaigned last year to make his tax cuts permanent, but dropped the idea in 2005 lest it interfere with reaching a compromise on Social Security reform. By locking in the tax cuts, particularly the deep reduction in the tax on stock dividends, Bush might strengthen the stock market. Without a negative spillover effect from losing on Social Security, he would have a better chance of success on the other parts of his agenda as well.