Commentary

Breaking New Ground on Social Security

One can be forgiven the first reaction: Oh no, not another Social Security commission. After all, appointing a commission to study ways to reform the national retirement program has almost become a presidential right of passage. Every few years a president appoints a commission. It breaks down in partisan haggling. Congress heaves a sigh of relief that it won’t actually have to make any tough decisions. And nothing happens.

But on second look, President Bush may actually have done the near impossible—created a Social Security commission that works. The commission is dutifully bipartisan and broadly diverse, packed with women, African Americans and Latinos. Its members come from a variety of backgrounds: government, business and academia. It is co-chaired by former Sen. Daniel Patrick Moynihan, whom official Washington regards as close to a sage, and Robert Parsons, the head of AOL Time Warner and a prominent African American Republican. Members include a former aide to Sen. Bobby Kennedy, a former Democratic congressman, an economist from the World Bank and former officials from the Reagan and first Bush administrations. But despite their varied backgrounds, commission members have one thing in common. All are committed to the idea of allowing younger workers to invest at least a portion of their Social Security taxes through individually owned accounts.

There is also a subtler but even more far-reaching facet to the commission. In the past, discussions of Social Security reform were dominated by the system’s financial plight. It is easy to see why: The program will begin to run a deficit in just 15 years and is more than $22 trillion in debt. This commission, by contrast, is composed of members committed to Social Security reform for other reasons.

President Bush set the tone for the commission himself, saying in a Rose Garden ceremony: “Personal savings accounts will transform Social Security from a government IOU into personal property and real assets; property that workers will own in their own names and that they can pass along to their children. Ownership, independence, access to wealth should not be the privilege of a few. They’re the hope of every American, and we must make them the foundation of Social Security.”

That is the real issue of Social Security reform—and it is a fundamentally different way of looking at the issue. It transforms the Social Security debate from one about numbers, budgets and actuarial projections into one about opportunity, hope and prosperity. It asks not just how can we preserve an aging and inadequate system, but how can we create wealth and retirement security for all Americans.

The road to Social Security privatization is far from assured. We are talking about nothing less than the transformation of the largest government program in the world. The opponents of individual accounts are already mobilizing. And the president will have to deal with the weak sisters in his own party who live in fear of doing anything “controversial.”

But for now, President Bush has gotten the debate off on the right start.

Michael Tanner is director of the Cato Institute’s Project on Social Security Privatization.