The political fistfight over Social Security reform suddenly looks more like a carefully choreographed ballet.
Republicans and Democrats are eager to make it their own campaign issue -- so they're concentrating on their footwork to avoid embarrassing missteps. But in so doing, both parties have neglected to address any specifics in this year's midterm election.
"The quality of debate today leaves much to be desired," said Henry Aaron, senior fellow at the Brookings Institution, a moderate think tank in Washington, D.C.
Democrats say they won't touch Social Security, while Republicans generally advocate carving out part of the Social Security trust fund and allocating it to private accounts. Such a plan would allow individuals to invest in the public markets. Republicans say they'll do this without raising taxes, cutting benefits or expanding the deficit.
"Since that's not possible, both sides are basically promising to do nothing," said Harry Zeeve, national field director of the Concord Coalition, a nonpartisan group focused on fiscal responsibility of social programs. "And that's a big problem."
Think tanks agree that an issue as thorny as how to reform the country's retirement program needs bipartisan support. Even if Republicans sweep the House and Senate in the midterm election, they'll still need to find enough support among both parties to pass any initiative.
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"Social Security is not a candidate for one-party reform," said Eugene Steuerle, senior fellow at the Urban Institute, a nonprofit, nonpartisan policy-research organization. In other words, no matter what the outcome of the midterm election, Social Security reform won't occur anytime soon.
The problem with Social Security lies in the fact it's a "pay-as-you-go" system -- essentially, the money it collects from people's paychecks today gets paid out immediately to current retirees. Right now, the Social Security fund is running a $159 billion surplus. The government has been using that surplus to fund other governmental operations, giving the Social Security trust fund some $1 trillion in Treasury bonds in exchange (politicians like to call these "IOUs"). But the system will be pinched in a few years, when the Baby Boomers begin to retire.
In 2017, the program will stop taking in more than it pays out. That's when the program will have to begin cashing in bonds -- and the government will have to make good on them. If the system isn't fixed, by 2041 the Social Security trust fund will be running a deficit.
President Bush made fixing Social Security a centerpiece of his 2000 campaign, and subsequently formed a commission that issued three proposals. All three operate under the same general principle -- that workers would be able to take a certain percentage of the payroll tax they currently contribute to the system, and divert it into a private account that they could invest in the public markets. In exchange, though, they would forgo a portion of guaranteed benefits.
None of the plans explained how the government would finance such a dramatic shift. That's primarily because the only ways to finance any change in the program involve cutting benefits (by raising the eligible retirement age, for instance), raising taxes or running an even larger deficit. Such options hardly make for a good campaign speech.
"Social Security could have been a big issue this election, but now it's not. That's because there's been no major proposal that's been fully vetted," said the Urban Institute's Steuerle. "The campaigns have been very careful in what they say."
Aaron of the Brookings Institution agrees. "Republican candidates know that Bush still backs some form of privatization, while Democrats think the Republicans have a loser on their hands, and they don't want voters to forget about the issue," he said.
The Midterm Follies
Early in the midterm election campaign, the National Republican Congressional Committee issued a policy statement that formally distanced the party from the somewhat misleading and unpopular term "privatization" when discussing Social Security.
"They jettisoned the idea entirely, and disavowed any interest in privatization -- a term President Bush used during his campaigning and has continued to use," Aaron said. "Instead, they talk about 'individual accounts,' but the problem is still the same -- the money has to come from somewhere."
Republicans have regrouped in the past few weeks, attacking Democrats for not having any plan at all.
"Things are looking fairly bright for candidates that favor individual accounts, which is somewhat of a recent change," said Michael Tanner, a Social Security specialist at the Cato Institute, a right-leaning think tank. "Republicans got tied up for weeks over the 'P' word, but now they've figured out how to respond." Tanner pointed to Elizabeth Dole, whose North Carolina Senate campaign includes waving around a blank sheet of paper and saying it's the Democrats' plan for Social Security.
While reform may be years away regardless of the outcome of the election, Bush is unlikely to drop the issue. "President Bush is clearly very tenacious when he gets the bit between his teeth," said Aaron. "I'd be very surprised if the administration says that they're going on to other things."