The former president of the Club for Growth, Stephen Moore (sorry for the implications in my diary title, I needed to keep it short), has an
article in the Weekly Standard asserting that the Bush privatization plan is on rocky ground.
PRESIDENT BUSH'S PLAN TO CREATE personal retirement accounts for Social Security, which seemed so promising a few months ago, is now officially floundering. Senate Republicans are now crafting a compromise proposal that takes personal accounts off the table. Meanwhile, House speaker Denny Hastert recently said "not this year" for Social Security reform. And Democrats remain united in their "just say no," obstructionist strategy.
Sniff, sniff! Democrats are mean!
Despite all this, there's still a path to victory for reformers--though little chance of instant gratification. If the debate over the past months on Social Security has established anything, it is that the Ponzi financing scheme for Social Security--an invention of FDR and the architects of the New Deal--is living on borrowed time. The political momentum here and in dozens of other nations is on the side of the privatizers.
Let's start with a proposition that seems increasingly self-evident: This is a fight for the long haul. The White House and Republican political strategists probably deluded themselves into believing that the stars were finally aligned to whip personal accounts through Congress this year. That calculus now appears to have been wrong.
Big mea culpa here. The Club for Growth, which Moore used to lead, helped put this on the agenda.
But Democrats are still doomed!
In short, the national Democratic party has erected a Berlin Wall of opposition to meaningful Social Security reform. Many political analysts (myself included) believed that after having been wiped out in the last two elections because of their bullheaded obstructionism, Democrats would be in a more accommodating frame of mind. Nope. And despite all their recent casualties, they still have sufficient forces to go on obstructing.
This is a key delusion - Republicans don't understand that the lesson Democrats learned from the Daschle defeat was that they should give no quarter. Daschle wasn't a "bullheaded obstructionist" - he voted for the Iraq war and ran campaign ads asserting that he was close friends with Bush. Republicans saw weakness and pounced.
But back to Moore.
But even though personal accounts may go nowhere this year, reformers can still take heart. Here's why. First, the policy debate is completely commanded by conservatives' ideas, not the left's. That's a political victory in itself. Second, if Republicans lose the fight this year, they have in many ways further imprinted in voters' minds the message that the Democratic party is reactionary and devoid of ideas. Republicans, by pressing boldly for personal accounts, have succeeded in demonstrating again that they are the party of reform. To most Americans, the main DNC/Brookings Institution/AARP talking point on personal accounts--that the program doesn't need fixing--is almost laughable.
cough WISHFUL THINKING
cough
Has anyone seen the AARP ad, by the way? Where the house is demolished? The point of the ad is that the sink is clogged - there's a minor problem. The narrator even says Social Security needs "minor changes." Moore is peddling this outright B.S. that AARP and Democrats don't want ANY fixes or change whatsoever, which I think is conventional wisdom in DC that is being discredited in the rest of the country.
Finally, and most important, losing the first round of the battle, if it comes to that, doesn't automatically discredit the idea. Consider the transformational policy milestones of recent decades. It has taken more than 20 years from the time President Reagan announced SDI, to almost universal skepticism from the intellectual class, for the missile shield program to become a (mostly) accepted component of our defense strategy.
So ... Social Security privatization will be as successful as Star Wars missile defense? Boy, I hope some privatizers make an ad out of that.
Then there's some more Moore babble about tax cuts and spending, then this:
Finally, to put the Democratic obstructionists in an especially uncomfortable position, it would make sense to start proposing fallback positions that at least get personal accounts started. One idea would be to defuse the fatuous "risky stock market" argument by simply offering a plan where workers can have a private account, but are permitted to purchase only Treasury bills. Take the stock market out of the equation and there is not even the odor of risk with personal accounts.
Treasury bills? Is he kidding? He might want to have a talk with George Bush, who thinks treasury bills are worthless IOUs.
Another idea: Since almost all Americans, regardless of political party or age, are infuriated by the practice of Congress "raiding the trust fund" and spending the surplus payroll tax revenues on road programs, Pentagon salaries, and Lawrence Welk Museums, why not just place the surplus payroll tax collections into millions of personal accounts? This would allow workers to direct about 2 to 3 percent of their paychecks into individual accounts without in any way jeopardizing benefit payments. The only fail-safe way to prevent the continuing trust fund raid by Congress is to divert the surplus dollars into personal accounts so they can never be looted again. True, the surplus only lasts for another 10 years, but over that period over half a trillion dollars would be placed in the investment accounts of workers, and the vital precedent of establishing personal accounts would be firmly established.
I'm starting to hear this argument more and more, but it doesn't make sense. Why not just pass legislation prohibiting Congress from spending Social Security trust fund money? We don't need to stash away money for the Pentagon in private accounts - legislators just keep their promise and pay for it. Do Republicans want to say that your Social Security checks are the only obligation they don't intend to honor?
This is a stunning article coming from such a privatization warrior. This movement is dying on its feet.