SMALL RISK, BIG REWARDS:

Social Security Poses Hurdles for President (ROBIN TONER and DAVID ROSENBAUM, 9/18/04, NY Times)

President Bush's vision of an "ownership society" is built, as much as anything else, on a sweeping promise: that he will transform Social Security so younger workers can divert some of their payroll taxes into private investment accounts.

At a rally in Pennsylvania last week, Mr. Bush declared, as he does at almost every campaign stop nowadays, that "younger workers ought to be able to take some of their taxes and set up a personal savings account, an account that they can call their own, an account that the government cannot take away and an account that they can pass on from one generation to the next."

It is a longstanding promise, popular with many younger workers and with conservatives who argue that the huge social insurance programs of the New Deal and the Great Society badly need to be modernized.

The private accounts, first proposed by Mr. Bush in his 2000 presidential campaign, fit neatly into his philosophy of an "ownership society," the idea that Americans should be given more control over - and responsibility for - their health care, retirement and financial lives.

But behind the sweeping promise are some harsh political realities that could loom large in this fall's debates and the final clashes of the presidential campaign. Mr. Bush has never proposed a specific plan to reach his goal - and, critics say, for good reasons. With the budget already running large annual deficits, recent estimates of typical plans for private accounts show they would cost as much as $2 trillion over the first 10 years. [...]

[T]he changes Mr. Bush seeks are difficult politically in a polarized Congress, where many Democrats are convinced that the Bush plan would undermine one of the last pillars of the New Deal.

One of the best indicators of how dramatically the political landscape has shifted over the past few years is that Mr. Bush need have no fear of grasping what was once the dreaded "third rail" of American politics. Major reform is never easy by $2 trillion is chump change these days--less than 20% of one year's GDP--and after the election it may no longer be possible to speak of a polarized Congress. Let Mr. Bush win 55% of the vote and get to--or close to--60 seats in the Senate and a better than 40 seat margin in the House and it will be necessary to speak of a Republican mandate to govern.

Posted by Orrin Judd at September 18, 2004 1:57 PM