Lesson Learned

Someday soon, when it can no longer be denied that the Bush administration's effort to phase out Social Security is dead, the president might call his team into the Oval Office for a postmortem. “What went wrong?” he'll ask. “I want complete honesty.” (Did I
mention that this conversation is fictional?)

Fingers will be pointed: Senator Charles Grassley. Representative Bill Thomas. Democrats. AARP. An honest voice might note that the “experts” at the Cato Institute had 20 years to figure out the details and never did the work.

After a bit of this, a pudgy pink finger, appended to the hand of a celebrated political guru, will rise. The room will go quiet.

“Mr. President, we forgot how we got here in the first place.”

“You mean setting up front groups to destroy our opponents?”

“No, Mr. President, we tried that on Social Security, and it didn't work. As you know, I am a student of history. After Barry Goldwater lost in 1964, a couple of political scientists concluded that Americans are ideological conservatives. They like tax cuts; they like the idea of smaller government. But they also love government programs. On that, they're liberal. So when Goldwater started talking about cutting programs, he was toast. Same with Ronald Reagan.

“We figured it out: Give people what they like about conservatism -- tax cuts -- but give them the programs, too! We didn't cut Medicare. We expanded it by a trillion dollars. We didn't cut education. But with the tax cuts, all the programs will be gone eventually. We've made Medicare such a mess people won't even miss it. But it will be someone else's problem.

“That's how we've done everything since 2000. And if we had kept doing it, Social Security would be on the way out, someone else would get the blame, and your poll numbers would be in the 70s.”

* * *

Whether or not this conversation ever takes place, you have to give the Bush campaign on Social Security credit for one thing: It was the first and only time the White House ever spoke of sacrifice, risk, or cutting programs. Sure, the cuts to guaranteed benefits were buried in the fine print. But by choosing not to embrace the “free lunch” plan developed by Cato's Peter Ferrara and instead accepting significant cuts in the guaranteed benefits of Social Security, eventually even getting specific about those cuts with “progressive indexing,” the White House broke decisively with past practice.

And so the only lesson the Republicans will take away from the debacle is: Let's not try that again.

The lesson has already taken. Consider this year's budget process. The White House had to show some seriousness about spending cuts if its promise to “cut the deficit in half” was to mean anything. Not surprisingly, the administration went after programs with weak clients, mainly Medicaid. But more important is how the combination is packaged. Instead of a single “reconciliation” bill containing all the major changes to taxes and spending, Congress is expected to pass two such bills -- first new tax cuts, then a separate bill with the cuts.

This may sound inherently uninteresting because it's about the budget. But trust me: Separating the two is as unprecedented as the “nuclear option.” By doing so, the White House ensures that its tax cuts are viewed in isolation. The Medicaid cuts then become virtually mandatory -- and they don't jeopardize the tax cuts. Blue-state Republicans can even get cheap credit for voting against Medicaid cuts while still voting the party line on tax cuts. The Medicaid cuts might even be defeated, but how long can Medicaid survive when federal revenues are already at levels of the 1950s, before the creation of Medicaid, Medicare, or half of today's cabinet departments?

* * *

For liberals, the fight against Social Security brought us home to familiar ground: They propose to cut a popular program, we defend it. But for the next three years, we will never see such a fat pitch over home plate again. That means getting beyond the “policy literalism” of Washington advocacy groups, which says that if your own program isn't being attacked, it's not your problem. It means understanding that it's the big picture that matters, and even if your favorite program gets a 4-percent funding increase this year, its very existence is in jeopardy.

Social Security privatization may be dead. But if we hope to salvage any part of the New Deal legacy other than that single program, we need to appreciate just how exceptional this fight was.

Mark Schmitt is a fellow at the New America Foundation, proprietor of
“The Decembrist” blog, and a contributor to TPM Cafe. Robert S. McIntyre will return next month.

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