As surprising as it may seem, this year's presidential election campaign may actually be waged about issues. And, increasingly, it appears that one of the biggest will be the future of Social Security.
Recently, Vice President Al Gore was asked what he would do toreform thenation's (indeed, the world's) largest government program; he responded, "Isay, if it ain't broke, don't fix it." The vice president went on to saythat if there were any little problems with the program, they could easilybe fixed "the way we always have."
Not broken? Well, excuse me, but was the vice president out raisingmoneyfrom Buddhist monks while Bill Clinton was holding town meetings across thecountry to discuss the need for Social Security reform? After all, wasn'tit Gore's own president who coined the mantra "save Social Security first?"
Social Security is broken -- badly broken. By 2015 the system willberunning a deficit. It will be officially insolvent by 2037. The program ismore than $19.4 trillion in debt. But even more important, the systempromises today's young workers that they will receive rates of return farbelow those they could expect from private investments. Indeed, many youngworkers will actually lose money under Social Security, receiving less inretirement benefits than they paid in taxes. That is especially true forindividuals in groups with lower life expectancies, such as the poor andAfrican Americans.
Because people don't legally own the funds they are forced to payinto theprogram, Social Security benefits cannot be passed to one's heirs. Thisprevents children of poor families from receiving the benefit of theirparents' years of paying into the system. And if all that wasn't badenough, the Supreme Court has ruled that Congress can reduce, change or takeaway Social security benefits any time it chooses. That turns retirees intosupplicants who depend on the whims of politicians for their retirementsecurity. This would not be tolerated in any private retirement investmentprogram.
By almost any measure, Social Security is a broken system. When he spoke of shoring up the program "the way we always have,"the vicepresident was referring to the program's history of raising taxes andcutting benefits. That is the way we've always done it. Social Securitytaxes have been raised 38 times. Even taking inflation into account, SocialSecurity taxes are 800 percent higher than they were at the program'sinception. Social Security payroll taxes are the largest single tax mostworking families pay. In fact, nearly 80 percent of Americans pay more inSocial Security taxes than they do in federal income taxes. And Al Gorewants to raise taxes more?
Social Security benefits have also been cut by raising theretirement age.The retirement age is scheduled to increase to 67 by the year 2027, whichmust be very comforting to African American men. Their life expectancy is65 years, 6 months.
Any increase in taxes or cuts in benefits will only further reducethe rateof return to young workers and make a bad deal worse.
Democratic operatives in Washington go to bed at night dreaming ofhowtheir party has used Social Security in the past to pummel Republicans. Butthis time the political terrain may be shifting. While Al Gore has deniedthe very existence of a Social Security problem, George W. Bush hasaggressively promoted Social Security reform, especially individually owned,privately invested accounts. Bush has been typically vague in spelling outthe details of his plan, but he has called for letting "the American peopleinvest part of their Social Security taxes for themselves." He has promisedto "use political capital" to get this through Congress.
This makes Bush's position far closer than Al Gore's to that of theAmerican people. Virtually every public opinion poll shows that substantialmajorities of American voters favor individual accounts. A recent ZogbyInternational poll showed that, by roughly 2 to 1, voters were likely tosupport a candidate who favored privatizing Social Security. That supportcut across all political, racial and demographic lines. Roughly 60 percentof union workers supported privatization, as did nearly 60 percent ofAfrican Americans and 70 percent of Hispanics. Working women, the crucial"soccer mom" vote, supported privatization by a margin of 60 to 36.
The days of Social Security demagoguery have passed. It appearsthat AlGore has been left behind with them.