Battle Lines Form on Social Security

The Social Security debate is providing the first big test of how Democrats in Congress plan to play out their role as the heavily outnumbered opposition party. If their actions so far are any indication, they are not going to be cowed into cooperating with President Bush.

Democrats are overwhelmingly opposed to Bush’s plan to allow younger workers to divert some Social Security payroll taxes to private investment accounts.

In the wake of their drubbing in the 2004 elections, they are still sorting out exactly how to wage this fight. But they sharpened their attack last week, in response to a two-day White House economic conference intended to showcase the argument for major change in Social Security.

Democrats deployed leading members of Congress to attack the most basic of Bush’s premises: They argued that the program’s problem was not as dire as Bush had claimed -- and that private accounts would make the problem worse.

Liberal interest groups, including the AFL-CIO and the National Assn. for the Advancement of Colored People, also mobilized last week to join the opposition.

“Message No. 1 to Americans: When it comes to Social Security, the sky is not falling,” said the Senate’s new assistant Democratic leader, Richard Durbin (D-Ill.). “There are people in this administration who have an agenda that is not friendly to Social Security.”

The early skirmishing underscores a troubling political reality for Bush: He is facing huge obstacles to winning Democratic support for an initiative that most analysts believe will collapse if the solution is not bipartisan.

Democrats, still bruised by the bitter politics of Bush’s first term, are in no mood to help the president and doubt his willingness to compromise. Bush lacks the leverage over Democrats he enjoyed in last year’s Medicare debate, when he had AARP, the powerful lobby formerly known as the American Assn. of Retired Persons, on his side.

To make matters even more difficult for the president, Bush has opened the debate by staking out positions that are anathema to many Democrats -- ruling out payroll tax increases, insisting on private accounts and suggesting that transition costs be simply added to the federal deficit.

“Bush keeps doing things that are not particularly helpful for getting bipartisan support,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a watchdog group that supports overhauling Social Security.

The basic outlines of the debate between Bush and Democratic critics are already clear: Bush argues that Social Security is headed toward insolvency and needs to be radically restructured to accommodate the financial drain to be caused by the baby boom generation’s retirement. Private accounts, he says, will give individuals more control over their retirement savings while helping to shore up the finances of the program.

Democrats argue that the insolvency of the program is so far off -- probably at least 38 years -- that such drastic changes are not needed to restore financial stability. They believe private accounts expose retirees to risks that undercut the programs’ basic role as a financial safety net for the elderly. They also say private accounts will not solve the program’s financial problems unless combined with substantial new federal borrowing and cuts in promised Social Security benefits.

Democrats are probably more unified than ever in their opposition to private accounts. Some respected Democrats had been sympathetic to the idea in the past, but most are no longer on Capitol Hill. Sen. John B. Breaux of Louisiana is retiring at the end of this year. Rep. Charles W. Stenholm of Texas lost his reelection bid. Former Sen. Bob Kerrey of Nebraska left Congress in 2000. Former Sen. Daniel Patrick Moynihan of New York died last year.

There are now a handful of moderate Democrats, mostly from states Bush won in 2004, who are trying to keep an open mind about private accounts. A leader of that faction is Sen. Thomas Carper (D-Del.), who is trying to develop a Democratic alternative to Bush’s plan that does not expose retirees to financial risk and that does not finance the cost of transition to a new system entirely by government borrowing.

“I don’t think it is sufficient for Democrats just to say no,” Carper said.

Will Marshall, president of the Progressive Policy Institute, a centrist Democratic think tank, said it would be damaging for the party to be seen as hostile to “reform.”

“Having simply tried to demonize privatization in three successive elections and not having tremendous results, they have to try something better,” Marshall said. “They have to develop a progressive alternative for reforming Social Security.”

But Rep. Robert T. Matsui (D-Sacramento), a party leader on the issue, is taking a different tack. In a conference call with reporters last week, he steadfastly refused to discuss a Democratic alternative to solving Social Security’s problems.

“We feel with Republicans in control of the House, the Senate and the White House, they have the obligation” to lead on the issue, Matsui said. “We will not come up with [a proposal] until they come up with one.”

Marshall Wittmann, an analyst at the centrist Democratic Leadership Council, said Democratic leaders were trying to avoid being the first to propose the painful measures -- benefit cuts or tax increases -- that most analysts believe will be needed to shore up Social Security.

“The White House is trying to maneuver Democrats into the position of doing the root canal work,” said Wittmann. “Democrats are not going to play dentist.”

Some Democrats believe that Republicans’ own resistance to revamping Social Security is strong enough that they will not need an elaborate strategy to defeat it.

“This is a plank the Republicans are going to have to walk down themselves,” said David Sirota, a former House Democratic aide who is now at the Center for American Progress, a liberal think tank. “I don’t think the Democrats need to give them a push.”

Although Democrats are just now gearing up their critique of Bush, they have been discussing it behind the scenes for some time. Starting months ago, senior Democratic staff aides have been meeting regularly with representatives of AARP, labor unions and other groups to discuss strategy.

Those efforts took on new urgency after Bush was reelected and he immediately made it clear that a Social Security overhaul would be a top priority in his second term.

The new Democratic leader of the Senate, Harry Reid of Nevada, began to make a strong case against private retirement accounts in an appearance this month on NBC’s “Meet the Press.” “They are trying to destroy Social Security by giving this money to the fat cats on Wall Street, and I think it’s wrong,” Reid said.

But then Bush invited Democratic leaders as well as Republicans to the White House for a closed-door meeting to discuss the issue. He had two White House economists lay out their analysis of the fiscal problem Social Security faces with the imminent retirement of the baby boom generation. He asked Democrats not to come out swinging against his plan before it was unveiled, according to one lawmaker attending the meeting.

After the session, Democratic leaders purposely avoided talking to reporters awaiting their reaction.

“They did not want to be put in the position of blasting the administration right out of the box,” a senior Democratic leadership aide said.

The next day, House Democrats met in a closed-door session to discuss strategy, and they heard George Lakoff, an expert on political communication at UC Berkeley, give a sober assessment of how Democrats were at a disadvantage because Republicans had successfully set the framework for the debate.

For years, conservatives have been broadcasting messages that lay the groundwork for revamping the program, relentlessly arguing that Social Security is unsustainable. Democrats have not successfully countered with the view that the program is in good health and sustainable for decades to come with relatively minor modifications.

The result: Polls show that huge majorities of Americans lack confidence that Social Security will meet their needs in retirement. An often-cited 1994 survey found that more people between the ages of 18 and 34 believed in UFOs than believed Social Security would exist by the time they retired.

Democrats now are stepping up their effort to tell the other side of the story. They are accusing Bush of exaggerating Social Security’s financial problems to scare people into accepting radical change.

“He is trying to create a crisis,” Matsui said. “The problem today is a manageable problem.”

Although Bush has made repeated pleas for bipartisan effort on the issue, even centrist, accommodating lawmakers fear that the president is alienating Democrats by inflexibly closing off options that should be on the table.

“What’s not going to work is for the president to take a ‘my way or the highway’ approach,” Carper said. “If he does, efforts to modify Social Security are dead.”

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The benefits

Facts and figures about Social Security:

* People collecting benefits this year: 47.4 million, or about one in six Americans.

* Eligible retired workers and dependents: 32.8 million.

* Eligible disabled workers and dependents: 7.8 million.

* Eligible survivors: 6.8 million.

* Total Social Security payout this year: $492 billion.

* Average monthly retiree benefit: $926.

* Date of first monthly benefit: Jan. 31, 1940.

* Size of cost-of-living adjustment next year: 2.7%, averaging about $25 a month.

* Size of first adjustment, in 1950: 77%.

* Older people receiving Social Security: 90% of those 65 and older.

* Workers in jobs covered by Social Security: 98%.

Sources: Social Security Administration, Associated Press