Investor’s Business Daily: ‘Dems Lining Up Behind Pledge To Fight Social Security Reform’

Investor's Business Daily
Dems Lining Up Behind Pledge To Fight Social Security Reform
Monday October 2, 7:00 pm ET
Jed Graham

With Republicans in control of Congress and the White House, Democrats have been the party of "No." No to the Republican agenda. No to tax cuts. No to spending cuts. And, most of all, no to Social Security reform with personal accounts.

But what would happen if Democrats pull off a clean sweep Nov. 7 and retake both houses of Congress? Having rejected President Bush's approach, would they finally offer their own plan to fix Social Security? Or will the looming entitlement spending crisis simply fester until 2009?

It's impossible to know for sure, but Democrats have taken an uncompromising line in their effort to capitalize on Social Security fears in the upcoming election.

Last month, the party's House and Senate leaders, Rep. Nancy Pelosi and Sen. Harry Reid, joined dozens of other Democratic lawmakers to kick off the "Golden Promise" campaign. The labor-backed Americans United, which has strong Democratic ties, is spearheading the effort.

The top Democrats all signed the Americans United pledge, which reads, in part: "We will work to improve the retirement security of all Americans and will oppose any scheme for deep benefit cuts or massive debt to fund risky private accounts."

"We want people to be on record," said Americans United spokesman Brad Woodhouse. By getting enough members of Congress to sign, the group hopes to "make it clear from the get-go that (the president) doesn't have the votes" to divert any portion of Social Security payroll taxes to finance personal accounts.

Bob Bixby, executive director of the Concord Coalition, which advocates fiscal responsibility, sees a danger that candidates will make commitments in their campaigns "that prevent them from doing anything meaningful on Social Security" after the election.

"In any election season, people start throwing charges at each other," and candidates stake out rigid positions, Bixby said. "Slowly and surely, it has taken all reasonable options off the table."

Enter a bipartisan group called For Our Grandchildren, which asks candidates to pledge to put aside partisanship and keep "all options on the table."

The For Our Grandchildren pledge also commits signatories to "honestly address the unfunded obligations of the current system and reduce the pressures on future taxpayers and other budgetary priorities."

Former Democratic Rep. Tim Penny, one of 10 members of Bush's Social Security commission who are part of the group -- said the goal is "to elevate the debate" and get candidates "to acknowledge that something must be done."

Penny said the pledge is broad and inclusive enough that it is consistent with either an AARP approach to reform or the president's plan.

'Options' Are Not An Option

But Americans United sees the For Our Grandchildren pledge as doing the bidding of the "privatizers."

"When they say 'all options on the table' ... you've got to consider privatization," Woodhouse said.

In August, Americans United ran an ad saying, "If George Bush and his backers in Congress privatize Social Security and cut benefits almost in half, what will you cut in half?"

The ad ran in Montana, Missouri, Ohio and Pennsylvania, where GOP Sens. Conrad Burns, Jim Talent, Mike DeWine and Rick Santorum, respectively, face tough re-election battles. It also targeted some vulnerable Republican House members.

Woodhouse predicts that if the president took personal accounts off the table, "the floodgates of cooperation would open." However, he said, "We don't think the conversation should start with benefit cuts."

11 Years Left

By 2017, Social Security will begin acting as a drain on the budget. In 2022, Social Security will pay out $100 billion more in benefits than it collects in taxes (in 2006 dollars). That will rise to $200 billion in 2027 and $300 billion in 2032.

Officially, the Social Security trust fund has enough money until 2040. But taxpayers will have to pay the cost to redeem the trust fund bonds.

In the president's 2006 State of the Union address, he said he wanted to create a commission for Congress to come up with a bipartisan agreement to reform Social Security, Medicare and Medicaid.

By 2030, the three programs are projected to cost 15.5% of GDP, up from 8.4% currently. In recent decades, annual federal tax revenue has averaged just over 18% of GDP.

But Bush's effort to find Democrats for his panel went nowhere after Robert Rubin, treasury secretary under President Clinton, said Democrats should take part only if Bush's tax cuts were on the table.

Penny said Bush wants to give Social Security reform another try, no matter who wins the election.

Would the dynamic be different if Democrats retake Congress?

Maybe, said Bixby of the Concord Coalition.

"It would be more likely that we would have a Social Security reform plan if Democrats get control of one branch of government and thus have a stake in the result," he said.

But there's plenty of reason to doubt "that the political climate is right" for a deal, Bixby said, including the continuing battle to make Bush's tax cuts permanent.