Social Security: The Democrats Need a Plan

[papau]

http://www.washingtonpost.com/wp-dyn/articles/A54848-2005Jan6.html

Social Security: The Democrats Need a Plan

By E. J. Dionne Jr.

Friday, January 7, 2005; Page A19


The debate among congressional Democrats is not about whether they should work with President Bush in his effort to privatize Social Security. It's about how to broaden the national political discussion beyond Bush's own agenda. It's also about how to stop a privatization scheme that even moderate Democrats view with skepticism.

Bush's problem is twofold. Many fiscally conservative Democrats reject the idea that borrowing an additional $1 trillion to $2 trillion to cover the transition cost of private accounts would somehow improve the nation's long-term budget outlook. And many disagree flatly with Bush's definition of the problem: There is no Social Security crisis, these Democrats say. There is a retirement crisis. And, yes, there is a health care crisis. As they see it, Bush is proposing a solution that won't work on an issue that should not be dominating the debate in the first place.<snip>

Emanuel and his former Clinton administration colleague Gene Sperling have worked on a series of proposals to create new private retirement accounts for workers without pensions. They would not be carved out of Social Security but financed separately. One way of covering the costs of these accounts: blocking the total repeal of the inheritance tax, as envisioned by Bush, and using the proceeds from levies on large fortunes to help workers who have little savings begin building their own nest eggs.

Such proposals have potential appeal across philosophical lines. Centrist Democrats are keen to increase the personal savings rate, particularly of lower-income workers. Liberal Democrats are angry at the skew of Bush's tax policies toward the very wealthy, represented most dramatically by the obliteration of estate taxation. It is no accident that Emanuel and Sperling both worked for Bill Clinton, a president skilled at blending social justice concerns with a market orientation.<snip>

Democratic resistance to Bush is rooted not just in the politics of the past but in a series of questions many Republicans are also asking. The serious probing on both sides recalls the bipartisan doubts raised a decade ago about Clinton's proposal for universal health care. Why should the country add huge amounts of new debt without reconsidering Bush's tax cuts? Why declare a Social Security "crisis" when one does not exist -- and without dealing with a health care crisis that really does? What confidence can middle- and low-income workers have that they will be better off with Bush's private accounts than with clear pension guarantees? Is there any point, beyond ideological predilections, to changing Social Security from an insurance program that has worked well to an untested investment program?

Until Bush can explain how his plan will work, few Democrats see any reason to help pass what they see as the wrong solution to the wrong problem at the wrong time.