Senator Eliot Shapleigh - El Paso, Texas

President Bush

The Administration’s campaign to do something about, or to, Social Security will get its prime-time launch next month in the State of the Union extravaganza, but President Bush is already busy softening up the battlefield. Last week, he granted his first newspaper interview since the election, to the Wall Street Journal, the parish bulletin of the nonevangelical wing of his political base. The first question was about his agenda for Social Security, and whether he would just be laying out general principles and leaving the details to Congress. “No, not necessarily so,” he said, adding:

That’s part of—that’s part of the advice my new National Economic Council head will be giving me as to whether or not we need to—here is the plan, or here is an idea for a plan, or why don’t you just fix it. I suspect given my nature, I’ll want to be—the White House will be very much involved with—I have an obligation to lead on this issue—I think this will be an administrative-driven idea—to take it on. And therefore, that that be the case, I have the responsibility to provide the political cover necessary for members, I have the responsibility to make the case if there is a problem, and I have the responsibility to lay out potential solutions. Now, to the specificity of which, we’ll find out—you’ll find out with time.

Even a professional actuary might have trouble parsing that one. But the initial thrust of the Bush approach—as laid out in his own comments, in speeches and memos by various assistants, and in material put out by groups such as the Alliance for Worker Retirement Security—is clear enough. It has two big themes. First, Social Security is in crisis, running out of money, about to go bankrupt unless something drastic is done. Second, privatization—eliminating part of Social Security and replacing it with a system of individual private investment accounts financed from a portion of workers’ payroll taxes—is somehow the key to avoiding the catastrophe, and is also a fine thing in its own right.

“This is one of my charges, is to explain to Congress as clearly as I can: the crisis is now,” Bush proclaimed at an “economic summit” a month ago. He does indeed have some ’splaining to do. This year, the Social Security system—the payroll tax, which brings money in, and the pension program, which sends money out—will bring in about $180 billion more than it sends out. It will go on bringing in more than it sends out until 2028, at which point it will begin to draw on the $3.5 trillion surplus it will by then have accumulated. The surplus runs out in 2042, right around the time George W. Bush turns ninety-six. After that, even if nothing has changed, the system’s income will continue to cover seventy-three per cent of its outgo.

That’s using the Social Security Administration’s economic and demographic assumptions, which are habitually pessimistic. Using the assumptions of the nonpartisan Congressional Budget Office, the surplus runs out in 2052. And if one uses the economic growth assumptions that Bush’s own budget office uses when it calculates the effects of his own tax cuts, the surplus runs out in—er, maybe never.

The “crisis,” therefore, is not “now.” It’s as bogus as the Alliance for Worker Retirement Security—which, in reality, is an “astroturf,” or fake-grassroots, front for the National Association of Manufacturers. There is no Social Security crisis, and there is not likely to be one. At some point over the next couple of decades, of course, some adjustments will have to be made. There are many reasonable possibilities: a modest rise in the retirement age, to reflect increases in health and longevity; a rise in the cap on wages subject to the payroll tax, which now cuts out at ninety thousand dollars a year; adding a bit to the progressivity of the benefits. One can even imagine a national decision to devote a larger proportion of national resources to the care of the old, given that a larger proportion of the population will be old—preferably to be paid for by taxing something we’d like to see less of (like fossil-fuel consumption) instead of something we’d like to see more of (like jobs).

Administration spokesmen have been suggesting that privatization will solve Social Security’s future financing problems. They’re fibbing, though. The much-hyped “crisis” looks suspiciously like the Social Security equivalent of W.M.D.s. This time, though, we have better intelligence. “White House officials privately concede,” the Times reported last week, “that the centerpiece of Mr. Bush’s approach to Social Security—letting people invest some of their payroll taxes in private accounts—would do nothing in itself to eliminate the long-term gap.” The Comptroller General of the United States, David M. Walker, agrees. “The creation of private accounts for Social Security,” he said in a speech last month, “will not deal with the solvency and sustainability of the Social Security fund.” The solvency and sustainability of Social Security, when and if it requires shoring up, will have to be dealt with the old-fashioned way: by increasing revenue and/or reducing guaranteed benefits.

The cynical, or maybe just the political, interpretation of the rush to privatization is that private accounts would, as David Brooks, the Times’ freshman columnist, wrote the other day, “create Republicans. People who have them will start thinking like investors.” (They won’t actually be investors, not in any meaningful sense—they’ll still be workers for hire. But, come election time, they’ll take their cue from the Dow, not from wage scales or income gaps or the unemployment rate.) The really cynical explanation is that privatization is a nice, clean way to transfer gigantic sums to Wall Street brokerage houses.

A third explanation—and, who knows, maybe a more accurate one—is that the true impetus to privatization is ideological. To say that is not to say, “How awful!” It’s actually a compliment. Ideology is less depraved than crude self-interest, even when it gets you to the same place. And one person’s ideology is another person’s “values.” The values behind Social Security privatization are not terrible. It is good to save. It is good to be self-reliant. It is good to plan ahead. It is good to be the little pig who builds his house of brick rather than straw.

But it’s not as if these values were not being taught in hundreds of other ways in our lives. And there are other values, too—values that are suggested by the words “social” and “security.” Yes, self-reliance is good; but solidarity is good, too. Looking after yourself is good, but making a firm social decision to banish indigence among the old is also good. Market discipline is good, but it is also good for there to be places where the tyranny of winning and losing does not dominate. Individual choice is good. But making the well-being of the old dependent on the luck or skill of their stock picks or mutual-fund choices is not so good. The idea behind Social Security is not just that old folks should be entitled to comfort regardless of their personal merits. It is that none of us, of any age, should be obliged to live in a society where minimal dignity and the minimal decencies are denied to any of our fellow-citizens at the end of life. “Thou shalt not covet thy neighbor’s house”—that’s a good admonition to keep in mind when making social policy. But so is “Honor thy father and thy mother, that thy days may be long upon the land which the Lord thy God giveth thee.”