If Lamm Gets Reform Party Nod, Expect New Debate on Entitlements

Former Colorado Gov. Richard D. Lamm is looking more and more like a candidate for the presidential nomination of Ross Perot’s Reform Party.

Lamm still hasn’t formally declared his candidacy. But since a California Reform Party convention earlier this month at which he first floated the possibility that he might run, he has steadily taken steps to sound out support and increase his visibility.

On Friday, Lamm is due in Washington to tout a plan to partially privatize Social Security; on Saturday, he’ll make his case at a Reform Party convention in Minnesota. He’s already set up a phone message system in Denver that gives supporters and reporters the latest updates on his media and speaking appearances.

A Democrat who served three terms as Colorado’s governor, Lamm continues to express concern that he might tip the presidential contest from President Clinton toward Bob Dole. But, increasingly, intimates are convinced that those doubts won’t be enough to hold him back.

“Lamm is running,” one member of his inner circle said flatly. “He is saying that more and more clearly.” Advisors are already trying to line up endorsements and hatching plans for a bus tour if and when he takes the plunge.

Lamm may still be left without a microphone if Ross Perot decides he wants the Reform Party nomination for himself. Though Perot has said he would prefer the party find another candidate, he has also refused to rule out running, and many observers continue to doubt he wants to be anywhere but center stage when the party selects its nominee in mid-August. Predicting Perot’s behavior is like forecasting tornadoes. But Lamm supporters are cautiously optimistic that if the former governor enters the race--and then demonstrates enthusiasm for his candidacy among Reform Party activists--he can, in effect, shame Perot into keeping his word to stay out.

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In the end, Lamm’s fans may be overestimating Perot’s capacity to be shamed. But the prospect that Lamm, not Perot, might carry the Reform Party banner into the fall is now sufficiently tangible that political professionals in both parties are beginning to ask what impact Lamm might have on the presidential race.

From an electoral perspective, Lamm would not be good news for Clinton. Perot, historically, has drawn his support almost evenly from both parties. Lamm, at first, might attract mostly Democratic votes.

Like former Democratic presidential candidates Paul E. Tsongas and Gary Hart, Lamm offers a blend of fiscal conservatism, environmentalism and social tolerance that has been most appealing to college-educated suburban voters. Clinton’s success with those voters is one reason for the lead he has enjoyed over Dole most of this year. If Lamm cuts into Clinton’s margins in the cul-de-sacs where Volvos and BMWs purr next to the recycling bins, the president may find himself breathing harder than he has so far.

Even so, Lamm’s greatest impact on the presidential race would probably come more from changing the structure of the debate than from altering the distribution of the vote. Lamm would introduce into the contest a series of issues that neither Clinton nor Dole is eager to discuss.

Lamm would place a higher priority on campaign finance reform than either major party nominee. But mostly, Lamm would carry onto the national stage the apocalyptic warnings of budget hawks who predict fiscal meltdown from the rising costs of Social Security, Medicare and other entitlement programs as the baby boomers move from condos to nursing homes over the next quarter-century.

“The New Deal,” Lamm says, “is unsustainable when the baby boomers start to retire.”

In 1992, Perot became famous for his bottomless collection of charts. If Lamm runs, he could become famous for one chart: an ominous graph from a federal commission on entitlements chaired by Sen. Bob Kerrey (D-Neb.) and then-Sen. John C. Danforth (R-Mo.).

The chart is a map to a cliff: It shows that under current trends, the cost of entitlement programs and servicing the national debt will consume virtually all expected federal revenues by 2010. That means either massive deficits or, as Lamm puts it, “no Defense Department, no national parks, no judiciary, no executive branch of government.”

Several trends converge to produce this nightmare scenario. The most important are demographic. As the 76 million baby boomers age, the nation is graying: the Social Security Administration estimates that the number of Americans 65 and older will double from 1990 to 2030, increasing from about one-eighth of the population today to one-fifth.

At the same time, the elderly are living longer. When Social Security was founded with a retirement age of 65, the average life span was 61. As Lamm recently observed, that’s not a bad actuarial bet. But the average life span is now 76 and expected to reach 78 by 2025.

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The real spike in the cocktail is the growing cost of health care. Even with the aging of the population, Social Security doesn’t face an acute crisis: Its trust fund isn’t projected to run out of money until 2029. But caught between rising costs and a growing caseload, Medicare and Medicaid face explosively growing bills. The Congressional Budget Office last week calculated that spending on Medicare and Medicaid will more than double as a share of the gross national product over the next 25 years.

Compounding all of these cost pressures is a revenue squeeze. The working-age population isn’t increasing nearly as fast as the number of retirees. By 2030, fewer than three workers will be paying taxes to support each retiree; in 1950 the ratio was 7 to 1.

With fewer workers and rising costs, the payroll tax would have to jump from its current 15.3% to nearly 25% by the year 2030 to preserve the current level of Social Security and Medicare benefits, the Kerrey commission estimated. That’s inherently unsustainable. Long before then, something has to give.

Lamm has plenty of ideas on what the something might be. Drawing on the work of the Kerrey commission and the Concord Coalition, a fiscal watchdog group, Lamm proposes an across-the-board assault on rising entitlement costs as the key to ensuring the nation’s long-term economic health.

Lamm’s ideas go far beyond anything Clinton or congressional Republicans have proposed. Lamm wants to raise the retirement age to 70; reduce the annual cost-of-living increases for Social Security and other programs; charge Medicare beneficiaries higher premiums, deductibles and co-payments; and impose an across-the-board “means test” that would reduce benefits from all entitlement programs to families earning $40,000 a year or more. To reduce the long-term pressure on Social Security, he wants to partially privatize the system by diverting a portion of payroll taxes into individual retirement accounts.

Though he’s more diplomatic than during the 1980s, when he once said the terminally ill elderly had a “duty to die,” Lamm would still forcefully make the case for establishing some limits on access to health care. “We save people from heart attacks at 75 to have them die of Alzheimer’s disease at 85,” he wrote in a recent paper. “An aging society needs a deeper dialogue on how we set limits.”

In conventional political terms, this agenda amounts to wrapping yourself in dynamite and then asking for a light. Even some of Lamm’s fellow entitlement Cassandras aren’t so sure the frenzy of a presidential campaign is the best place to introduce Americans to these ideas.

Privately, almost everyone in official Washington agrees that the cost of retiring the baby boomers will demand at least some of the measures Lamm (like Kerrey and Danforth before him) is proposing. But inside the administration, some deficit hawks worry that by airing these incendiary proposals in the campaign, Lamm will virtually compel Clinton and Dole to disavow them. That could make it much harder to adopt a reform package later.

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That’s a legitimate fear but one fundamentally pessimistic about democracy. There is another possibility. Perot’s strong showing in 1992 greatly intensified the pressure on Clinton and Congress to deal with the deficit in 1993. Lamm could likewise enlarge the constituency for confronting the long-term entitlement crunch--if he has the skill and tenacity to deflect the bipartisan counterattack he would inevitably provoke. “Nothing ventured, nothing gained,” says Martha Phillips, executive director of the Concord Coalition. “But once you put these issues into play, it is going to be very tough.”

The Washington Outlook column appears here every other Monday.