Social Security’s future is the first, and gargantuan, legislative issue of the post-Monica era. Moreover–in stark contrast to the cigars, secret tapes, dress stains and related prurient detritus that have crippled the public conversation these past thirteen months–this issue deserves our deep, authentic and undivided attention.
Without Social Security, half of all Americans over 65 today would live in poverty. In the next century, the issue of Social Security’s health will grow even more important–and not just because baby boomers will soon join the ranks of the elderly. Thanks in part to the vaunted global economy, fewer than half of US workers currently retire with private pensions. And thanks to changes in federal pension regulations some years ago, most of those who do have private pensions now participate in “defined contribution” plans–plans that fix what is put into their retirement accounts but make no guarantee of what will come out in retirement, as older “defined benefit” plans once did.
In his State of the Union address in January, President Clinton outlined his three-point proposal for “saving” Social Security:
(1) Dedicate roughly three-fifths of projected federal budget surpluses to shoring up the system’s reserves;
(2) Invest a limited portion of those reserves through the government in the stock market, for potentially higher gains;
(3) Create Universal Savings Accounts–the rough equivalent of IRA or 401(k) accounts–so that all working Americans can put aside some of their income tax-free and invest it for optimal growth, with the government chipping in for the lower paid.
The package revealed the Clinton whom The Economist once dubbed “the Exocet President of policy,” a poll-guided, issues-tactical genius, stealing plans from allies and opponents alike and making them his own. Early polling by AARP and other groups found overwhelming public support for Clinton’s proposals.
But as the past year has taught us, overwhelming public support bears but lightly on democracy as practiced in Versailles-on-the-Potomac. Within hours after the State of the Union, Republican leaders stumbled over one another to pronounce Clinton’s Social Security package dead on arrival. As Henry Hyde and his fellow House managers must now ruefully know, however, Republicans may not control the fate of Social Security any more than they did impeachment, despite their solid Congressional majorities.
Where should progressives and liberals stand? Surely we’re for preserving the shared pool–not just of funds but of trust and mutual obligation–that Social Security represents, and we’re against radical privatization. But Clinton’s plan makes the other choices more difficult, because it’s more deeply rooted in the hard-edged practice of politics than in principle. Here, then, are some of the issues and questions we should be raising:
(1) Is Social Security really in jeopardy–and thus in need of major changes? Projections that show system shortfalls (not bankruptcy) starting thirty years from now are just that–actuarial projections that use very low economic and population growth rates, well below historical trends. Tweak those assumptions just slightly and the whole “crisis” disappears. But most Americans have been convinced by the press and the politicians that a crisis looms out there, so being dismissive may not be our best card.