Bush gets the Social Security ball rolling

By JAMES P. PINKERTON
LONG ISLAND NEWSDAY
Right now, prospects for George W. Bush's Social Security reform campaign look bleak. That's no great surprise. In the polarized and partisanized Washington of today, gridlock usually wins.
But there's no election right now, and there's no end in sight to the debate over Social Security and keeping it solvent. So Bush might yet claim a victory, in 2006, or perhaps even after he leaves office.
This year, after months of intense presidential barnstorming, support for his partial-privatization plan has fallen. Throwing an additional log on the fire, last week he proposed to make Social Security "progressive" -- reducing future benefits for the affluent while protecting benefits for the poor. But polls show most Americans oppose that idea, too.
No wonder many top Republicans on Capitol Hill want Bush to drop his effort altogether. Indeed, the pro-Bush Weekly Standard advised W to develop an "exit strategy" to get himself out of the "Social Security quagmire." Yet a few Republicans are thinking even more boldly than the president. House Ways and Means Committee Chairman Bill Thomas of California wants to use the controversy over Social Security to open up an even bigger debate -- about the future not only of pensions and entitlements, but also of tax and savings policy.
That is, if the issue is to protect and boost the retirement income of Americans in the future, why not find ways to increase their wealth, through, say, more tax-sheltered investments? After all, that's what rich people do: They build nest eggs for themselves, such that government payments are mere icing on their egg. So, Thomas says, let's have more eggs for more folks.
The debate the congressman wants to launch will take years to hash out. Which is to say, we all have time to think seriously about the related issues of retirement security and wealth creation. And so here are two points to bear in mind.
Private savings
First, Bush deserves credit for opening the debate over private savings. Back in the New Deal days of the 1930s, the leading minds assumed that America would go socialist. So it only made sense to make retirement a government-operated program, so as to help get people used to the idea that Uncle Sam would take care of them.
Since then, that approach has been tried and found wanting. In Europe, payroll taxes have just about killed job growth, and the debt load is bankrupting national governments. One way out of that fiscal thicket is the encouragement of private savings, bolstering economic growth and allowing for more retirement wealth.
Indeed, forward-looking leaders in both parties are already fostering a more private-sector-oriented "ownership society."
Last month, Sen. Charles Schumer, D-N.Y., and a bipartisan group of lawmakers introduced the ASPIRE Act (America Saving for Personal Investment, Retirement, and Education), which would establish tax-sheltered accounts for newborns, including a one-time federal contribution of $500. A small beginning for babies, perhaps, but through the miracle of compound interest, a big nest egg waiting at the end of life's rainbow.
Holy writ
Second, Bush deserves credit for challenging orthodoxy that Social Security benefits should go to everyone, regardless of need. Democrats, the self-proclaimed party of the little guy, have made it a matter of holy writ that Bill Gates must get a Social Security check, too -- nevermind that those same little guys are hurt by soaring payroll taxes.
Displaying the worst kind of reactionary liberalism, the Democrats argue that since everyone pays in, everyone should get a check. But let's think about that for a moment. We all pay for police -- are we somehow ripped off if we never have to call 911? Eventually, Democrats will have to show their status-quo hand on Social Security, which contains just one card: raising taxes.
Bush and Thomas have shown courage and vision. And history will reward them, because the tide of political economy continues to move toward individual ownership and autonomy. But that historical reward will take time to become visible.
Los Angeles Times-Washington Post News Service