If anyone had any doubt that the former Texas Rangers official in the White House plays hardball, the newly created President's Commission to Strengthen Social Security erases it. This is the Nolan Ryan approach to political combat: Here comes my high, hard one. Hit it if you can.
By shamelessly naming a team of committed privatizers to the panel, President Bush has demonstrated political courage that liberals can only wish Democrats might display. Jauntily tying himself to the proverbial third rail of American politics, Bush ignored the rules that normally govern Washington commissions. Usually, a commission assigned to deal with a thorny political problem draws on a wide range of perspectives, with one of two purposes: Either it's designed to discuss a problem politely until the urgency goes away, allowing politicians to duck an issue, or it uses its bipartisan cast to make unpopular decisions that diffuse the political onus equally. [See "Sins of Commission," by Michael Lipsky and David J. Olson, on page 16.]
This commission is different. Its very purpose is to design a bill that would turn some portion of Social Security over to private accounts. Bush instructed the panel to toss out every option for Social Security except the one that he campaigned on: privatization. The May 2 executive order creating the commission explicitly says that its conclusion "must include individually controlled, voluntary personal retirement accounts."
For Bush, there'll be no disowning the commission, so closely is it tied to the White House. Its staff director will be Chuck Blahaus, a White House official long associated with the movement to privatize Social Security, first as an aide to Senator Judd Gregg of New Hampshire, a leader of the congressional privatization caucus, and then as head of a lobbying group created by the National Association of Manufacturers to push for dismantling Social Security. (Another key staffer will be Andrew Biggs, who is taking a leave from the Cato Institute, the think tank most closely associated with privatizing Social Security.) When the commission report is issued, complete with plans to divert a substantial portion of payroll taxes to private investments, it will also have to include painful choices about how to pay for the plan, including gobbling up $1 trillion or more of the projected surplus, cutting benefits for future retirees, and more.
Bush seems willing to pay whatever price attaches to that. Indeed, according to several sources, Bush himself insisted on tackling Social Security in a tough, no-nonsense way, over the objections of some aides--and to the consternation of some Republicans in Congress, who don't look forward to being saddled with privatization of Social Security in their 2002 re-election races. And the fact that Congress isn't likely to take up privatization seriously next year doesn't take away from the fact that Bush has now put Social Security squarely on the chopping block: In the fall, Bush's panel will recommend changes to the system that were unthinkable a decade ago.
Led by ornery former Democratic Senator Pat Moynihan of New York and yet another African-American Republican who doesn't like entitlement programs, AOL Time Warner COO Richard Parsons, the commission includes Carolyn Weaver of the American Enterprise Institute and Fidel Vargas of Reliant Equity Investors. The latter two served together on the 19941996 Advisory Council on Social Security and were part of the faction that backed the most radical recommendation, a plan to divert 5 percentage points of the 12.4 percent Social Security tax on earnings to private accounts. Two other commissioners, former Representative Tim Penny of Minnesota and Sam Beard, the voluble president of Economic Security 2000, a pro-privatization grass-roots group, serve on the board of the Cato Institute's Project on Social Security Privatization. And another, Thomas R. Saving of Texas A&M University, is on record calling Social Security "an illegal pyramid scheme," adding: "We must destroy Social Security, as we know it, in order to save it."
"I think it's unlikely you'll see the Full Monty," says Michael Tanner of Cato. "But it could go beyond 2 percent." Still, many analysts believe that diverting even 2 percent of the Social Security tax to private accounts is the start down a slippery slope that will turn the system into a two-tiered affair, with affluent taxpayers opting for private accounts to supplement savings and private pensions, and poor and working-class taxpayers stuck with a Social Security system that pays sharply reduced benefits.
Over the next few months, the commission is expected to conduct a public road show to tout its mission, with rote public hearings, while the staff does its work in secret. Don't expect Congress to act next year on its recommendations. But if the Democrats mount only a feeble challenge to this plan in 2002 and Republicans retain control of Congress after that, count on the end of Social Security as we know it.