Few issues loomed as large in the presidential election as what to do about Social Security, and the differences between Texas Gov. George W. Bush and Vice President Al Gore were stark. Gore would have left the current system essentially unchanged, relying on a variety of accounting gimmicks to steer general tax revenue into the troubled program. His proposal would have avoided any tough choices today, but left his successors with the dilemma of raising taxes or cutting benefits.
Bush, by contrast, would have made important first steps toward reform, partially privatizing the program by allowing younger workers to divert a portion of their Social Security taxes to individually owned, privately invested accounts.
Opponents of Social Security privatization mounted a major campaign to demonize Bush’s proposal. In commercials and speeches, Gore hammered Bush for threatening the benefits of current elderly recipients of Social Security. Experts agreed that Gore’s attacks were pure demagoguery, but their ferocity only increased in the last days of the campaign, targeted especially to senior-heavy states like Florida. Special interest groups from labor unions to the AARP to the National Committee to Preserve Social Security and Medicare weighed in with phone banks, mailings, and newspaper ads, pouring millions of dollars into an effort to electrify the third rail of American politics. Ed Asner, that noted Social Security expert, provided recorded phone calls to seniors in an attempt to scare them into the voting booth.
Yet despite this unprecedented campaign of distortion and fear mongering, the American people came down firmly on the side of privatization. Exit polls showed that 57 percent of American voters supported individual accounts. Only 39 percent opposed them. In fact, more than a third of Gore voters favored privatization. Imagine that—on the central issue of Gore’s campaign, a third of his voters deserted him.
As pollster John Zogby notes, “The third rail has been broken.” Gore’s campaign even failed to frighten seniors. Nationwide, Gore managed to carry elderly voters—a traditionally Democratic group—by a margin of only 50 percent to 47 percent. In Florida, seniors split evenly between Bush and Gore.
Results from further down the ticket also favored pro-privatization candidates. High-profile privatizers, such as Sen. Rick Santorum of Pennsylvania, were re-elected, and there are indications that a majority of new members of Congress favor individual accounts. Indeed, the House of Representatives will likely have a pro-privatization majority, including a significant number of Democrats.
All this happened despite a relatively weak response by Bush to Gore’s attacks. Social Security privatization is not an issue where a candidate can be “a little bit pregnant.” Yet Bush often seemed defensive about the issue, struggling to reassure seniors and counter Gore’s charges, rather than highlighting the advantages of his approach. It was Bush’s plan, after all, that would have avoided the huge tax increases or benefit cuts that Gore’s proposal would have ultimately required. No less than President Clinton himself has said that there are only three choices when it comes to Social Security: raise taxes, cut benefits, or get a higher rate of return through investing in private capital. Bush favored private investment. Since Gore opposed it, it would have been valuable for Bush to ask him which of the other two choices he favored.
And speaking of higher returns, it was Bush who offered a better deal to young workers. Gore promised only a continuation of a system that provides young workers with returns of 1 percent or less. None of Gore’s proposals would have increased that return by even a single percent. He should have been confronted directly on that point.
And finally, for all his populist rhetoric, it was Gore who would have continued a system that penalizes African-Americans and prevents the poor from accumulating real wealth. It was Bush’s proposal that would give workers a property right to at least a portion of their Social Security taxes. Under Bush’s proposal, workers would own their money, accumulate wealth, and leave it to their heirs.
Bush had no need to be defensive about his plan to partially privatize Social Security. Indeed, it was one of the strongest and most popular aspects of his campaign. He should have been more outspoken about it. If he had been, we might have been spared the current confusion and uncertainty.
Bush may yet emerge the winner of this election. But whoever becomes our next president, we know what the American people want him to do: allow people to invest part of their Social Security taxes.