Candidates looking for a winning issue in the 2004 elections should pay close attention to a new Gallup poll. It shows that American voters still strongly support proposals to allow younger workers to privately invest a portion of their Social Security taxes through individual accounts. Indeed, despite the sluggish stock market of the last couple of years, relentless Democratic attacks, and the failure of Republicans to provide real leadership on this issue, a stunning 62 percent of voters support individual accounts, up 5 points since summer.
Moreover, the support for individual accounts cuts across nearly all political, ethnic, and age groups. One would expect young people to support individual accounts, and they do, by a margin of 83 percent to 13 percent. Voters in their 30s and 40s also support individual accounts, 72 percent to 26 percent. Even 27 percent of seniors (understandably the most skeptical group) support accounts.
Likewise, while its probably not surprising to see 77 percent of Republicans and 69 percent of conservatives backing the proposals, individual accounts draw the support of half of self‐described liberals and even receive the backing of 42 percent of Democrats. Roughly 61 percent of African‐American and Hispanic voters want to give workers a chance to invest privately.
This should come as no surprise to those who have been following the changing political landscape on this issue. There was a time, not long ago, when Social Security was regarded as the “third rail” of American politics — touch it and your career dies. But, no more. American voters have come to understand that the current Social Security system cannot continue the way it is today. In just 15 years, Social Security will begin to run a deficit, spending more on benefits than it takes in through taxes. The federal IOUs in the Social Security Trust Fund are an accounting measure, not real assets that can be used to fund the program.
It was former President Bill Clinton who pointed out the limited options for reform: raise taxes, cut benefits, or get a higher rate of return within the system through private investment. Given those choices, voters prefer private investment.
In the 2002 Congressional elections Democrats tried to play the Social Security card, and failed miserably. In every race where Social Security was a major issue, supporters of individual accounts won. Just ask Sens. Sununu, Dole and Graham. This time around, several candidates have taken up the issue: Pat Toomey in his Pennsylvania primary campaign, Jim DeMint in South Carolina, and Mac Collins and Herman Cain in Georgia, among others. President Bush, who campaigned in favor of individual accounts in 2000, plans to return to the issue in 2004, making it a central part of his domestic policy agenda. The third rail has clearly lost its juice.
But, so far, Democrats, including the nine Democratic presidential candidates, seem stuck in the past, unable or unwilling to discuss the issue beyond ritual denunciations of “privatization.” Perhaps it’s just habit, ritually falling back on the rhetoric and positions that have worked for them in the past. But in doing so, they have turned their back not only on such thoughtful Democrats as former Sen. Bob Kerrey and the late Daniel Patrick Moynihan, but also on a majority of American voters.
It has been apparent for some time that allowing workers to privately invest their Social Security taxes is good policy: the only way to fix Social Security’s problems without raising taxes or cutting benefits. It is also becoming clear that it is good politics as well.
If the former doesn’t convince Democrats to give workers ownership and control over their retirement money, perhaps the latter will.