January 14, 2005


Hardball 101 (Ryan Lizza, 01.13.05, NEW REPUBLIC)

It is getting increasingly difficult to find any Democrat who backs President Bush's plan for partially privatizing Social Security. Private accounts are now officially out of favor even among New Democrats, the most obvious source of potential administration support. The Democratic Leadership Council and a new centrist policy shop called Third Way both recently announced their opposition. Over in the House, many have been eyeing Adam Smith, the leader of the New Democrat Coalition, which has 67 members in the House. But, in an interview with The New Republic, Smith for the first time ruled out support for any proposal that includes private accounts funded through a carve-out of the Social Security payroll tax. "Social Security is a safety net. That's what it's there for. It's there to be the safest portion of your portfolio," he told me. "It's a guaranteed benefit for a reason, and, for that reason, I don't support private accounts." Smith doesn't speak for every moderate Democrat, but, he added, "I think there is broad consensus among New Democrats that you must not privatize the system."

The idea of a New Democrat movement that would see the American Left pursue a Third Way in politics, bringing free-market and moral forces to bear on social welfare programs, was always more rhetorical than real--as witness the vacuous career of its avatar, Daniel Patrick Moynihan. Nonetheless, it did elect a president, Bill Clinton, and he did sign Welfare Reform, even if out of political necessity. So it's really startling to see just how dead the idea is among Democrats, especially when Tony Blair, John Howard, and George W. Bush have used it to forge what look to be permanent realignments.

Posted by Orrin Judd at January 14, 2005 12:16 PM

The very idea that social security forms part of a "portfolio" demonstrates that they're not to be taken seriously.

Posted by: David Cohen at January 14, 2005 12:20 PM

Mr. Cohen:

Right. And even if it is conceived as part of a portfolio, it's a pretty crappy deal compared with the stock market in general and its long-term insolvency hardly makes it "safe" for younger people who plan to stick around for a while.

I'm 23. Let's take one of the best-case scenarios floating around (conducted by the CBO) and assume the system runs out of money in 2052. That's near my approximate check-out date, so I might be mostly in the clear, but there are people alive today who will be miserably failed by this dysfunctional system.

If we don't fix this thing now, it will be harder to fix later. I'm truly proud of President Bush for having the guts to take on this problem -- which he definitely doesn't have to do.

Posted by: Matt Murphy at January 15, 2005 12:07 AM