Private Accounts Alive and Well

October 30, 2002

National Review senior editor Ramesh Ponnuru investigates the status of private account reform during this election. He writes, "For the last five years, 'privatization' has been debated in Washington. Supporters and opponents alike used the term to refer to plans that would allow people to invest some of their Social Security contributions for themselves. In 2000, George W. Bush became the first major-party nominee to support such a plan. He has not backed off from it as president. In January, a commission he appointed made the case for private investment accounts and outlined three reform options"

Ponnuru continues, "The anti-privatization rhetoric that pervades the current campaign may lead people to think that President Bush's idea is now dead. It's not. True, a few Republicans have disavowed private accounts. New Jersey Senate candidate Doug Forrester supported them in the primary, but has now flip-flopped. Four House candidates have come out against private accounts, too. Florida congressman John Mica signed a no-private-account pledge as part of his re-election campaign, but has since disavowed the disavowal (flop-flipped?)…But that's about it for defections. Most Republican politicians continue to support private accounts — all they've repudiated is the word 'privatization.'"

He writes of Democrats, "The word-change certainly has the Democrats hopping mad. They consider Social Security their strongest issue. They have won several midterm elections over the last generation by accusing Republicans of wanting to shred the program. Polls show that the public still trusts the Democrats more than the Republicans on Social Security. Democrats expected their advantage to grow in a year of corporate scandals and sliding stock prices…But bashing Republicans on Social Security hasn't worked as well for the Democrats as they had hoped. They have gotten bogged down in a debate over the meaning of 'privatization.' They're spending their time establishing the Republicans' position rather than criticizing it."

Ponnuru concludes, "The 2002 campaign has thus been a disheartening spectacle for reformers. But things could have been much worse. Private accounts were bound to face strong opposition this year. This is the first midterm election under a president who supports them. It's also the first midterm election in a protracted bear market since they became an issue. Under the circumstances, Republicans could easily have succumbed to the pressure to come out against private accounts. With very few exceptions, they haven't…President Bush wants Congress to take up Social Security reform next year. Nothing that's happened in the campaign so far should dissuade him."

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