Bush's House of Cards

On a sweltering morning in late July, 300
demonstrators, rallying to defend
Social Security against President Bush's plan to dismantle it, swarmed around the
presidential limousine as it pulled up in front of the Capital Hilton. Inside the
hotel, members of the President's Commission to Strengthen Social Security--which
is supposed to come up with a program that replaces a chunk of Social Security
with uninsured private-investment accounts--were getting ready to meet. Peering
down at the gathering through a pulled-back curtain on the second floor were Mike
Tanner and David John, analysts from right-wing think tanks--the Cato Institute
and the Heritage Foundation, respectively--that have drafted privatization
schemes and provided the commission with staffers. "So that's the working class!"
huffed John, not impressed.

The limousine door opened, and President Bush emerged looking only
slightly more goggle-eyed and clueless than usual. The revved-up crowd--which had
been chanting, "Hey, hey! Ho, ho! Bush and Wall Street got to go!"--changed its
yell to "Take off the mask!" And in fact, this particular Bush really could
have taken off a mask, a lifelike rubber one that made him look remarkably like
the real George W. Instead, sticking to the script, the ersatz Bush tendered a
Queen Elizabeth wave and scuttled back into the car, which roared away. The crowd
cheered and continued to picket the hotel.

Organized by the AFL-CIO and the American Federation of State, County and
Municipal Employees (AFSCME), the demonstrators--part of a nationwide
mobilization against Bush's push for privatization of Social Security--included
women's groups, the disabled, community activists, and seniors. The event in
Washington, D.C., may have been the largest and loudest held that day, partly
owing to the fact that the commission's not-too-bright schedulers had picked a
hotel a block away from the headquarters of both the AFL-CIO and AFSCME.
But it was only one of several dozen similar rallies and press conferences all
across the nation for which organized labor provided the muscle.

But it wasn't just labor. Quietly surveying the activity outside the Hilton
were a handful of officials from the Democratic National Committee--including Dana
Kennedy, director of seniors outreach for the DNC, which has assumed a
leading role in building a state-by-state grass-roots movement to defend Social
Security. For the DNC, this is an unprecedented effort--and indeed, the
DNC's engagement is one sign that Bush may have fatally overreached in
challenging the Social Security status quo. Remarkably, there are indications
that AARP, the sleeping brontosaurus that boasts 35 million members, is also
entering the fray. Bush is frightening the elderly and near-retirees by slashing
away at the social safety net, with potentially devastating consequences for the
Republican Party at the polls next year. "Not only will they lose the issue, but
it could conceivably cost them the House in 2002," says Guy Molyneux, a
Democratic pollster.

Back inside the Hilton, a cascade of panicky comments from commissioners made
it clear that they are afraid of losing control of the debate. Most flamboyant was
former Republican Representative Bill Frenzel of Minnesota, who blasted the "herd
of critics, some of whom were parading in front of the hotel" for their
"know-nothing, Luddite" reaction to the work of the commission. (Frenzel claimed
to his fellow commissioners, a bit melodramatically, that he was "forced [by the
demonstrators] to walk in the street, where I was struck by a taxicab." Later, he
admitted in an interview that nothing of the sort had happened.) "I am convinced
we have not spoken out enough in the press," worried Robert Pozen, vice chairman
of Fidelity Investments, whose company stands to reap a windfall if a flood of
retirement funds is directed into his coffers. "We [can't] let the critics get
away with cheap shots," he added. Robert Johnson, the multimillionaire chairman
and CEO of Black Entertainment Television, singled out the House minority
leader, Democratic Representative Richard Gephardt of Missouri, for "hyperbole
with a kill-the-messenger approach."

Speaking of hyperbole, the commission's interim report, issued in late July,
drew heavy fire not only from activists but from middle-of-the-road economists and
newspaper editorial writers. By warning that Social Security is "broken" and that
it faces imminent financial collapse, the Bush panel went overboard in an attempt
to weaken public confidence in the system in order to demonstrate that a drastic
overhaul--most especially, the creation of private accounts--is necessary. By
arguing that the $1-trillion Social Security trust fund is made up of worthless
government IOUs, the commission stirred up a wave of criticism. The New York
Times
said that the commission "exaggerates the problems facing Social
Security to justify a quick move toward privatization" and accused it of
"outrageous misstatement." The Washington Post called it "combative and
somewhat skewed" and said it "disparaged a program it pretended merely to
describe."

Democrats on the Move

The Democratic Party's decision to launch a counteroffensive, replete
with grass-roots events in 40 states, can potentially change the political
landscape. For years the Democrats have allowed their precinct-based
organizations and state parties to wither, preferring to let television
commercials (and President Clinton, when he was in the White House) carry their
message. All along, they knew that groups like the AFL-CIO, the NAACP,
and pro-choice and environmental groups would sustain work at the grass-roots
level. Now, for the first time in memory, activists say--and DNC officials
agree--the party is setting out to mobilize its base. "They want to get the state
parties active on this, which I certainly haven't seen before," says Wendy Ray,
field director for the labor-connected group USAction. Agrees Hans Riemer,
director of the Social Security Information Project for Campaign for America's
Future, "It was the engagement of the DNC and the leadership in the House
that changed everything."

That's not to say that grass-roots mobilizations come easily to the DNC.
Since the beginning of the Bush administration, the DNC sought several times
to get the ball rolling in opposition to key items on the White House agenda such
as tax cuts, the energy plan, arsenic in water, oil drilling in Alaska, and the
appointment of right-wing judges. But little clicked. Then suddenly, with the
appointment of Bush's stacked-deck crew of commissioners with a mandate to
unravel the golden threads of America's most-loved safety net, the DNC found
the Big Mo'. "There is a clamor," says Bill Burke, a former union organizer who
is now the DNC's director of special projects. "We're getting calls on this
from all over."

"It's a first here. Everyone is looking to us to be the coordinating
mechanism," says Maria Cardono, the DNC's communications director. "It's sort
of a new role that the DNC is playing." It's particularly striking because in
last year's presidentialelection campaign, Bush touted his plan to privatize
Social Security and Al Gore utterly failed to capitalize on it. "If we'd been a
little more aggressive and more vocal, it would have been different," admits
Cardono. Says another DNC official, "It's a lesson learned."

Leading the effort is Gerry Kavanaugh, the brand-new policy director for the
DNC who'd spent a decade as Senator Edward M. Kennedy's staff director.
Beginning in mid-June, well before the Social Security commission's July 24
meeting in Washington, D.C., the DNC began contacting state parties and
members of the House and Senate to participate in a coordinated, nationwide
series of events on July 23. Certain events would be staged in state capitals
with key members of Congress taking part, while others would happen in major
cities like Chicago, St. Louis, Los Angeles, and Philadelphia. Some were
organized by the DNC and the state parties, some by USAction, the
AFL-CIO, or Campaign for America's Future.

In the House, a crucial role was played by Congressman Bob Matsui of
California. That in itself might be considered unusual, since Matsui is a member
of the Democratic Leadership Council's New Democrat coalition in the House and
has clashed bitterly with organized labor over trade issues. But Matsui is also
the ranking Democrat on the Social Security subcommittee of the House Ways and
Means Committee, so he's the point man for Democrats opposed to
privatization--and he is downright fiery about it. At a press conference held
during the Social Security commission's most recent meeting, Matsui denounced the
commission's work as "shoddy" and an "attempt to frighten the American people
into believing that the system is in such bad shape that we need a radical
solution." He warned Bush: "Throw out this commission that has no credibility at
all!"

In late June, the DNC contacted Matsui's office and asked for help in
winning commitments from dozens of House members to take part in the events being
organized around the country. "We worked with the DNC," says a Matsui aide.
"We probably contacted 40 to 50 members, and we ended up with 20 to 25
participating." That so many members of Congress would help out back in their
home states on a Monday--which is usually a travel day for them--was
"remarkable," says the aide. From Trenton to Fresno, from New Hampshire to Iowa,
scores of congresspeople, senators, governors, state legislators, and Democratic
Party officials joined constituency groups to blast privatization.

And they didn't mince words. John Veen, a regional director for the Democratic
Party in California, told a rally outside Social Security's Fresno office that
privatization "is designed to help the rich. It is a ploy for Bush's rich friends
to dip into this pot of money they've been drooling over for decades." In New
Jersey, Representative Rush Holt has called the commission a "kangaroo court"
whose plan would "send retired seniors to a stock market roller-coaster ride."
Congressman Maurice Hinchey of New York says that a privatized system would
"threaten current benefit levels" and "reward Wall Street financial firms who
contributed generously to the president's election campaign."

The antiprivatization blitz generated an enormous volume of news coverage.
Moreover, with high-level elected officials and community activists joining in,
Bush advocates had difficulty finding their voice. There were few Republican Party
leaders available for comment, so rebuttal was in the hands of local GOP
flacks. And with the commission not yet having put forward a concrete plan, its
allies had nothing to point to.

The DNC--which encouraged elected officials to get involved, mobilized the
state parties, and sent out packets with talking points and model press
releases--views the effort as the first of many. "This will be our template," says
Gerry Kavanaugh, who is certain that the Social Security campaign will be
sustained with an eye on the 2002 elections. "I don't think there's any question
that's one of our primary goals."

AARP Is Rejuvenated

Little noticed in all of this but with the potential to
become vastly important is the nascent stirring of aarp. On the eve of the
commission meeting in July, AARP's new executive director, William D. Novelli,
issued a harshly worded critique of the Bush panel: He called its work "flawed and
biased," "alarmist," and "outside the mainstream." Its approach, said Novelli,
would result in a "dramatic overhaul of Social Security that would lead to cuts
in guaranteed benefits and shift financial risk to individuals."

And there are signs that AARP is rousing its membership to back its
words. In Pennsylvania organizers of the antiprivatization events were surprised
when they got calls from Walter Collins, AARP's Philadelphia representative,
who suggested that AARP would like to take part in that city's rally. "What
happened was the national organization called our Harrisburg office, and they
called me," says Collins, who adds that he was astonished that the traditionally
cautious behemoth was getting involved. In the past, he says, "they've couched
their opposition in such vague terms that I call it whispering from the
rooftops." AARP also took part in events in New York City, Pittsburgh, and
elsewhere.

John Rother, director of legislation and public policy for AARP, thinks
that the times may indeed be a-changin', partly because of the egregious nature
of the commission itself, which is stacked with proponents of dismantling the
system. "We're usually pretty pragmatic, and we usually try to be bipartisan,"
says Rother, "but neither of those adjectives applies to this commission."
Another factor, Rother adds, is that Novelli is "very action-oriented" and wants
to do more. "We typically don't do a lot of street events," Rother says. "But in
this case, we felt that the report of the commission was so blatantly an effort
at manipulation that it was important to call the public's attention to it."
Consequently, AARP's field staff let the organization's representatives around
the country know about the upcoming antiprivatization events, and some took part.

The specter of a working alliance among the Democratic Party, the
AFL-CIO, and AARP to mobilize voters on Social Security is a haunting one for
potential Republican candidates next year. And it can only get worse for the gop
late this year, after the White House commission issues its concrete plan to
introduce private accounts into the system, since the blueprint will inevitably
include substantial cuts in benefits for future retirees or other unpopular
measures. "I think the Democrats know that when the plan comes out it will be
something to hang round the necks of Republican congressional candidates next
year," says Roger Hickey, co-director of Campaign for America's Future.

Fear of running for office in 2002 with the albatross of Bush's Social
Security commission dangling around their collars is palpable among Republicans
in Congress. It has already shown up in the split between Karl Rove, Bush's
political Svengali, and Tom Davis--a U.S. representative from Virginia and
chairman of the National Republican Congressional Committee--whose job it is to
re-elect the majority next year. According to the conservative Weekly
Standard,
Davis is ever more concerned that the White House's Social Security
plan could lead to significant Democratic gains in 2002. Part of his alarm stems
from the June 19 special election in Virginia's Fourth Congressional District;
although the GOP's Randy Forbes won, Democratic ads linking Forbes to
privatization of Social Security triggered a 10-point shift among elderly and
near-retired voters in that hard-fought contest.

According to pollster Guy Molyneux, acceptance of privatization has been
steadily dropping over the past year or two. For years, he says, polling data
showed that privatization had a superficial appeal for many voters, especially
among younger Americans; but even that support--which hovered around 65
percent--has "fallen dramatically" to just 50 percent in recent months. "And as
soon as they are told that privatization could mean benefit reductions, a lower
cost-of-living increase, or a higher retirement age," he says, "the bottom just
drops out." Even scarier for the privatizers, support for Social Security as it
currently exists is strongest among older voters, who are far more likely to
vote, especially in off years, than younger ones are. Molyneux adds: "I've always
thought this was going to be a pretty easy fight to win."

That conclusion is shared by Michael Burgess, executive director of the New
York Statewide Senior Action Council, a grass-roots group that took the lead in
organizing the July 23 event in Albany, New York. "People are just coming out of
the woodwork," he says. "We don't have to do very much to get people roused up."
Besides working with Democrats, his coalition is putting the squeeze on 12 mostly
moderate New York Republicans in Congress. "We're asking them to sign a pledge,"
he says, "and we're saying we will not vote for any candidate who endorses
privatization."

A big help to the Democrats' mobilization is the nearly unanimous opinion
among the party's factions--minus a few hard-core Blue Dogs like Representative
Charlie Stenholm of Texas--that privatization is a bad idea. The Democratic
Leadership Council, representing the pro-business wing of the party, has
abandoned its flirtation with partial privatization. "I'd say that Democrats are
united in their disappointment at Bush's handling of the Social Security
commission," says Bruce Reed, president of the DLC and President Clinton's
former chief adviser on domestic policy. By proposing radical changes to the
system, says Reed, Bush has guaranteed that the Democrats will retaliate with
everything they have. "It's like 'Mutual Assured Destruction,'" says Reed. "When
one side fires off something so potentially dangerous, the other side has to
respond in kind."

The next MAD salvo will precede the commission's meeting on August 22,
when activists expect to launch another counteroffensive. Frenzel, the Republican
congressman from Minnesota, is clearly worried. Noting that the commission has
attracted such vitriol well before its recommendations are to be released (in
late November or December, most likely), Frenzel anticipates the worst. "I wonder
what they will do if we approve something," he remarked at the commission's July
meeting. "That's a little scary."

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