As I write this [19], the country has recently re-elected President Clinton by a nationwide majority, after a campaign in which one of his main promises was to "protect America’s poor and elderly". Florida and Arizona, normally counted as Republican turf in a presidential election, went Democrat, and it was widely remarked that these are states with heavy concentrations of retired seniors. Haley Barbour, Republican National Chairman, has concluded that "Social Security is still the third rail of politics" — it will electrocute any politician who touches it.. He anticipates that Medicare will be reformed (because it’s already broke, and no campaign promise can get around that), but that Social Security pension reform will be placed on hold. [20]
I think this is a misinterpretation. Seniors voted that nobody should take back the pensions they’ve already been promised. Republicans protested that they never intended to do that, and in very fact, they didn’t: supporters and detractors of the existing Social Security system alike agree that any reform must protect those who’ve already committed their future to its care, relying on what sounded like a government promise. (They also agree, and have agreed for a long time, that Social Security faces a crisis in later years if it’s not reformed, and that the crisis will be worse, the longer we delay doing anything about it.) The question is what to do about promises being made to the retirees of a decade or two from now — what promises we can honestly make and what we must do to insure that they can be kept. Nonetheless, many seniors were distrustful (as Democrats naturally encouraged them to be), and said so with their votes. It doesn’t follow that they are opposed to changes which leave their own benefits unaffected. Nor does it follow that leaving senior benefits in place while we curtail unfulfillable promises to their juniors is automatic cause for resentment. It depends on what we’re doing to relieve the juniors of dependence upon the unsustainable part of Social Security.
A case can be made that the second term of Bill Clinton will be the ideal time to reform Social Security, on the grounds that only a Democratic administration will ever be trusted to change it. President Clinton may be vital to reform for the same reason that only Winston Churchill could have led Britain into a wartime alliance with the Soviet Union, only Charles DeGaulle could have ended France’s deadlocked war in Algeria, and only Richard Nixon could have extended U.S. recognition to Red China. Unpopular but unavoidable projects are most readily accomplished by those whose heart it breaks to accomplish them.
In any case, discussion of Social Security reform remains afoot in Congress. Proposals from the Republican side involve considerable privatization of the system, and even some Democrats are toying with the idea that Social Security should invest part of its surplus in the stock market.. I wish the privatizers all possible success — with the mental reservation that I expect "all possible success" to fall short of full privatization, and that’s fine by me. The privatizers are right about one thing: the Social Security system must begin to invest money that it takes in, leaving the money at work long enough to produce the benefits which are distributed. There are sound reasons, however, to do part of the investing in activities of the government.
People get choked up when they discuss "privatization". Since we are obliged to walk an electrified third rail, I think it would help to distinguish four different issues, and try to strip them of fighting words:
Smooth words won’t mask the fact that some of the alternatives characterize the existing system and others have been associated with "privatization". It is fair, though, to point out that the issues are separable. A system which invests exclusively in public enterprise might still find it desirable to furnish people with individual accounts, limit benefits (beginning some time in the future) to a "life support" level, and allow individuals to extend their coverage beyond the minimum. Conversely, the existing system could stay mostly as it is, but start investing its trust funds outside government. (It will be difficult to salvage the system, though, without amending the "replacement wage", at least as to what it replaces.)
So, balancing carefully, let’s explore along the third rail.
|
|
|
|
|
 |
 |