WHAT'S BEHIND IT?; A Bit Of Social Engineering In Disguise
For Republicans, Social Security reform could be the kind of donnybrook that health care reform was for Democrats in 1994. The magnitude of the political risk is staggering. On Capitol Hill, many Republicans wonder if they are being led off a cliff. What does President Bush think he's doing?</br></br>Well, he says, there's a Social Security crisis. "The crisis is now," Bush said in December. But he must know this isn't true. Economically speaking, stabilizing Social Security's long-term finances is a task of only middling difficulty and importance. It requires no fundamental change in the program and need not be tackled right away. As for private Social Security accounts, they are -- again, economically speaking -- a solution in search of a problem.</br></br>No, what Bush and the Republicans are focused on is not the economy, stupid. It is conservative social engineering on the grandest possible scale.</br></br>When people talk about Social Security reform, they usually mean reforms, plural. They're usually linking two changes that are conceptually and mechanically distinct. Reform No. 1 would reduce the growth of benefits -- or raise payroll taxes -- to bring the program into long-term fiscal balance. Reform No. 2 would structurally revamp the program by creating private accounts: A portion of your Social Security payroll tax would go into an investment account with your name on it instead of going to the U.S. Treasury to finance the benefits of current retirees, as now happens.</br></br>Congress can adopt one idea, both ideas or neither. Either, by itself, is politically difficult; doing both -- simultaneously cutting and restructuring the program -- is audacious. Yet that is what Bush seems likely to propose. Why take the chance? On close examination, the economic payoffs are unimpressive. The moral and political dividends are potentially another matter.