New Contract
In Bush's 'Ownership Society,' Citizens Would Take More Risk
Beyond Social Security Moves, His Vision Encompasses Health Care and Housing
Shrinking the Safety Net
By JACKIE CALMES
Staff Reporter of THE WALL STREET JOURNAL
February 28, 2005; Page A1
WASHINGTON -- President Bush's campaign to revamp Social Security is just the boldest stroke in a much broader effort: To rewrite the government's social contract with citizens that was born of Franklin Roosevelt's New Deal and expanded by Lyndon Johnson's Great Society.
In what Mr. Bush calls an "ownership society," Americans would assume more of the responsibilities -- and risks -- now shouldered by government. In exchange, the theory goes, they would get the real and intangible benefits of owning their own homes, controlling their retirement savings, and using tax credits or vouchers to shop for education, job training and health insurance.
The emphasis would be on the individual, supplanting a 70-year-old approach in which citizens pool resources for the common good -- and government doles out benefits. In the Bush vision, the nation's social safety nets would still exist, but on a smaller scale, targeting the most needy. Others would move to private-market alternatives of their own choosing. The president's policies, his advisers say, reflect his deeply held belief that "ownership" has the power to transform people, just as he feels transformed by a midlife decision to quit drinking and embrace religion.
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In health care, Mr. Bush is pushing Health Savings Accounts, which combine low-cost, high-deductible insurance policies, along with private accounts to cover smaller expenses. Such accounts allow people to pocket savings if they don't go to the doctor. In housing, Mr. Bush hopes to help Americans buy homes, while shrinking government's role as landlord to the poor. In education and job training, he pushes vouchers and tax breaks for savings accounts that individuals can tap to buy services in the marketplace.
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Critics say Mr. Bush's vision is blind to economic risks facing Americans, especially lower-income workers. William Gale, a Brookings Institution economist, dismisses the president's agenda as "the Dismantling-the-Safety-Net Society." Some applaud his rhetoric, but say the president's policies -- heavy on tax breaks -- don't broaden ownership, but favor the well-off. The poorest workers, exempt from income taxes, can't take advantage of tax breaks for savings. Eugene Steuerle, a Reagan-era Treasury official now at the Urban Institute, titled a recent analysis, "An Ownership Society, Or A Society For Those Who Already Own?"
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But for low-income renters, the situation is getting tighter. Spending for rental vouchers isn't increasing enough to cover rising housing costs, or the number of families seeking help. Mr. Bush's budget request for fiscal 2006 through 2010 would, by the final year, leave the government able to fund vouchers for 370,000 fewer families than this year, according to the Center on Budget and Policy Priorities, a frequent critic of the president's policies. At the same time, the federal government and local housing authorities are steadily cutting back on the stock of public housing.
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Write to Jackie Calmes at jackie.calmes@wsj.com
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http://online.wsj.com/article/0,,SB110955295099465498,00.html 
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