Yesterday a number of blogs seized on an article by Ken Bazinet in the Daily News as an example that President Bush was cutting loose private accounts and refocusing his energy on achieving ‘solvency’ in Social Security with steep benefit cuts.
It seemed to me that they were over-interpreting what the article or Bush actually said. What Bush actually said was that “you can solve the solvency issue without personal accounts.” And it seems to me he’s given different versions of that statement a number of times over the last two or three months.
But my point here is not to get into an argument about what that comment meant. Atrios and others may well be right. And important political shifts are often signaled by seemingly inconsequential statements.
But regardless of whether they’re right in this case, Bush probably will eventually pivot in just this direction. So it makes sense to air the issue now.
Basically, as long as everyone has an accurate understanding of the big picture, I don’t see why the defenders of Social Security should be worried by such a shift in direction from the president.
The thinking is that Democrats, having invested so much political and rhetorical energy in opposing ‘privatization’ will now be faced with a president who says, in so many words, ‘I’m not for privatization or private accounts. You’ve got no beef with me. I’m just for solvency.’
But this is a case where simply going back to the basic facts of the matter helps clarify the debate.
What President Bush wants is to phase out Social Security. That isn’t just rhetoric or words designed to put the other side off their footing. It’s really the truth of the matter. Social Security is a social insurance program with guaranteed benefits for Americans when they retire — benefits of a level to provide a baseline of support in old age. The very concept offends the president, as it does many of his supporters. The key is guarantees, which are the essence of security.
Privatization was the first and most obvious way to phase out Social Security. If privatizing doesn’t work, he may try just going at it directly — not just by cutting benefits, per se, but by cutting the rate at which Social Security keeps up with the actual costs of living in the United States. And that distinction is key since over time it will be whittled down to nothing.
In other words, it will be phased out, perhaps not entirely, but close enough as to make it an irrelevancy. Then people will be on their own in retirement, much as they were seventy-five years ago, before there was Social Security.
Like many people who share President Bush’s ideological viewpoint, Social Security was always a bad thing. It’s just taken time to find a convenient way to get rid of it.
The search for ‘solvency’ is simply a dodge. For starters, President Bush wants to lock in steep cuts now based on pessimistic projections of Social Security’s future finances. Needless to say, if the projections are wrong, the benefits won’t be restored. But ‘solvency’ is a dodge on an even deeper level.
If I run a business and I’m not bringing in enough money to pay expenses, solvency can easily be restored by just closing down my office and ceasing to sell anything. Then my inflows and outflows will be equal because I’ll be out of business. Similarly, if I’m not making enough to send my children to the best schools or give them the best medical care, I can solve that problem by pulling them out of school and just giving them aspirin. Then the shortfall is solved.
Admittedly, these are blunt examples. But they illustrate the point: any discussion of ‘solvency’ is meaningless outside of the context of the aim or project you are trying to make solvent.
President Bush says there’s a problem, that there may not be funds to pay everyone’s benefits in the 2040s. His solution: cut their benefits. That way we’ll be able to pay the full benefits because they’ll be smaller. Problem solved.
This is the essence of his solution.
And that doesn’t even get into the fact that he doesn’t want to pay back the money already borrowed from the Trust Fund to fund his tax cuts among other things.
Privatization is a means to the president’s end: phasing out Social Security. I’m sure he’s willing to try any number of ways to get there. The other side wants to preserve Social Security. That’s the debate. Nothing has changed that.
