Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

Articles by Josh

Please tell me this isn't a hemorrhoid commercial.

In Rep. Allen Boyd's OpEd piece in today's Tallahassee Democrat, the Dean of the Fainthearted Faction says that private accounts are "preparation, not privatization (emphasis added)."

Two new Social Security plans from Senators Hagel and Bennett, reports the Associated Press. So now there is Tangerine and Strawberry phase-out to be added to plum version the president has already put on the table.

Each raids Social Security to set up private accounts.

Each includes steep cuts in benefits.

Each kicks off phasing out Social Security and replacing it with private accounts.

This is just an intra-Republican conversation about how to best structure phase-out. It can't be of any particular concern or interest to those who don't believe phase-out should happen at all.

Simple Point: Social Security is an insurance program. And the point is not a semantic one. In conventional insurance, the more people participate, the lower the premiums and the more secure the plan. This is particularly so since those who have the least immediate need for the insurance are the most likely to opt out. Just so in Social Security. The more people opt out of the system with private accounts, the greater the costs for those who choose to hold on to their Social Security with its guaranteed benefits. And in this case that translates into either higher taxes or reduced benefits and most likely both. Social Security can only work with near-universal participation.

That is what the push for private accounts is all about. It means the end of Social Security by stages.

(Private health insurance carriers, of course, try to get as many healthy people as possible and as few sick ones, a tactic policy wonks call 'creaming'. But it's the same difference since that only means forcing the costs of the ill off on to government programs like Medicaid or emergency rooms and the like.)

Private Accounts = Ending Social Security. The advocates of private accounts know that. Which Democrats and Republicans will sign on?

David Winston, Republican pollster, Roll Call, March 8th: "Bush, in his State of the Union address, began to lay the predicate for the Social Security discussion. Polling data nearly across the board shows that Bush’s Social Security blitz in the past few weeks has convinced the majority of Americans that Social Security needs fixing now."

CNN/USAToday poll analysis, USAToday, March 2nd: "In early January, Americans divided evenly when asked whether Social Security needs major changes in the next year or two. Now 59% say it doesn't need to be changed right away."

Are Democrats pursuing a shortsighted policy by simply opposing the president's drive to phase out Social Security, as a few are now suggesting?

I feel confident that the answer to that question is, no.

Only I don't think the Democrats are just saying, no. They're staking out a clear position in support of preserving Social Security and its guaranteed benefits rather than phasing it out and replacing it with private accounts.

But inside that question are a host of different subsidiary questions and assumptions. And they're worth discussing. So let me start discussing a few of them now.

First, some suggest that without having a clear counter-proposal on the table, Democrats risk having President Bush outflank them by dropping privatization and claiming a victory with some more limited reform.

But consider what this means and what the objectives are of people who are opposing the president's effort to phase out Social Security.

To my thinking, the prime objective of preventing the president from phasing out Social Security is preventing the president from phasing out Social Security.

The potential opportunities for the Democrats are immense, no doubt. And I hope they materialize as much as anyone. But they are, at the end of the day, secondary. If President Bush were somehow able to abandon privatization and wholesale benefit cuts, embrace a sensible reform package that would enhance the longterm solvency of Social Security and somehow frame this as a political victory, that would be a bummer for Democrats, as Democrats. If he were really successful at spinning this as a success, it would also be unfortunate in that it would give him a renewed ability to pursue other parts of his legislative agenda. But the aim here I think is to prevent the president from phasing out Social Security. So if he chooses to embrace the program and say that's what he wanted all along, I can only say that there are simply worse scenarios I can imagine than that.

On a more concrete level, I don't think the comparison between this debate and the president's turnabout on the Department of Homeland Security is a particularly compelling one. Neither conservatives nor Republicans had any ideological or principled investment in 'Homeland Security' being an office in the White House rather than a cabinet department. Nor did any Republican constituency have a vested interest in his initial stand. This was purely a decision made within the White House, for a series of contigent reasons, but principally to limit congressional oversight and enhance executive branch power. Once the president changed his tune, all the Republicans changed their tunes, because their only agenda all along had been supporting their president on a partisan basis.

The situation with Social Security is very, very different. And the president's room for maneuver is not that great. Any substantial move on the president's part should expose deep fissures within his governing coalition -- a number of which have already appeared.

More globally, I think these 'political' questions (like 'why has the president not been damaged more' or 'how can the Democrats be sure not to be outmaneuvered') are premature. In the past I've written about how Democrats have been weakened politically in recent decades (particularly on national security issues) by placing too much focus on political outcomes and not enough on policy goals. My point here isn't really one of idealism. It is merely to note that an over-emphasis on political outcomes -- and the policy shiftiness required for trimming to secure good ones -- reaches a point of diminishing returns and can become self-defeating. (Pace Mr. Klein, this is not an issue of ideological purity, regardless of what may immediately spring to your mind. It is a matter of deciding on your goal, choosing policies that will acheive it, and then pursuing those policies.)

The truth is that Democrats do have a goal here. There very much is something they stand for. And for those who don't, they should. That is, protecting and enhancing the retirement security of all Americans. Everything that advances that goal should be seen as a victory and everything that diminishes it should be seen as a defeat. At present, through their unity and advocacy, Democrats have significantly reduced the chances of a phase-out bill passing in the 109th Congress. Even at this early stage, that's a big victory.

Again, I am not so naive to say that Democrats should pursue a policy agenda and leave the politics to take care of itself. But consider the following. The hook for some of this second-guessing about Democratic strategy is a memo out a few days ago from James Carville and Stan Greenberg of Democracy Corps. And in that memo they argue that the deeper vulnerability for Democrats (and why they are yet to derive greater political returns on Social Security) is what they call "voters' deeper feelings about the Democrats who appear to lack direction, conviction, values, advocacy or a larger public purpose."

Well, here's the deal. Spin has its limits. You show voters that you have direction and conviction and values principally by having them. And for all the short- and medium-term political handicapping, I believe that's what they are doing right now.

What the Democrats need to do now is think seriously and creatively among themselves about why a program like Social Security is so important and what the principles and priorities gleaned from that examination suggest in terms of other policies they should be advocating and pursuing. As for what they're doing in the political arena right now, I think it's just right.

Later, we'll discuss what the Dems can learn for stage two of the Social Security fight from how they dealt with stage one.

Rep. Gene Taylor (D) of Mississippi on the president's reckless fiscal policies: "We are now over $2 trillion deeper in debt than we were four years ago. The interest payment, alone, on the debt is $1 billion every day. People talk about morals; well, it's immoral to take people's money and it's immoral to stick our children with the bill."

Another Democrat leaves the Fainthearted Faction: Rep. Ike Skelton (D) of Missouri.

In a letter now going out to constituents he says that Social Security "is a guaranteed insurance policy that must never be weakened by risky privatization plans like the one supported by the Bush Administration ... While the proposal is touted as a way to 'save' Social Security, private accounts would worsen the program's fiscal challenges."

According to the Times, the <$NoAd$> Social Security Trust Fund is a bit of an afterthought.

The US Treasury bonds held in the Trust Fund may be give Social Security a better claim on federal revenues than other priorities. But maybe not.

As Timesman David Rosenbaum puts it ...

But trust fund or no trust fund, bonds or no bonds, Social Security is only one program with a claim on the federal budget.

There will be highways to build and, perhaps, wars to fight. There will be expenses for education and health care and many other government activities. And there will be citizens - voters - who do not want their taxes to be raised.

Maybe because of the trust fund, the politicians will decide that Social Security has the strongest claim.

But if so, that will be a political decision, not a legal one.

In other words, it's all a big misunderstanding.

We're hoping someone can help us with this. Following up on yesterday evening's post on Joe Klein's comments yesterday on Meet the Press, we are hoping some TPM Reader can provide us with an example from Klein's writing (columns, magazine articles, even public comments) in which he explains his contention that whereas Social Security was suited to the 'industrial age' it is not well suited to the 'information age', whereas a private accounts system is.

To refresh memories on the key passage ...

I agree with Paul in that private accounts have nothing to do with solvency and solvency is the issue. I disagree with Paul because I think private accounts a terrific policy and that in the information age, you're going to need different kinds of structures in the entitlement area than you had in the industrial age. But it is very hard to do that kind of change under these political circumstances where you have the parties at such loggerheads.

If anyone knows of an example where <$NoAd$> he explains this argument, please send it along.