Perspectives on Election 2002

November 26, 2002

In a November 20th Investor Business Daily article, "Big Winner In Midterm Vote: Social Security Privatization," Cato Institute chairman Bill Niskanen discusses the outcome of Election 2002 and what it means for the politics of Social Security reform:

Two important patterns in the midterm congressional elections have almost escaped notice and discussion: Every candidate who supported individual retirement accounts won. And the most vulnerable incumbents in both parties were moderates who had sometimes voted with the other party on an important issue.

Both patterns have important implications for future policy and the characteristics of our polity. Social Security has long been considered the "third rail" of American politics, and the Democratic leadership tried to make the 2002 elections a referendum on Social Security. In response, most of the Republican candidates tried to avoid the issue, to the point of an agreement to eschew the word "privatization."

Seven Republican candidates for the Senate, however, and six Republican candidates for the House -- all of them facing hostile advertising and several of them running against incumbents -- forthrightly defended their support for individual retirement accounts.

Social Security Winners

All 13 of these candidates won their election, in several cases by a larger margin than in 2000.

Both the Democratic and Republican congressional leadership appears to have overestimated the aversion of American voters to an open political debate about this important issue.

This almost unnoticed pattern in the midterm elections should embolden President Bush to renew his support for individual retirement accounts and for the new Congress to have a frank discussion about the future of Social Security and alternatives that would both protect the benefits of those who choose to stay in the Social Security system and increase the choice of retirement plans for other workers.

Second, contrary to conventional expectations, the most vulnerable incumbents in both parties were moderates who had sometimes voted with the other party on an important issue.

Democratic Sens. Jean Carnahan and Max Cleland lost, Sen. Mary Landrieu faces a run-off next month and Sen. Tim Johnson faces a potential recount; all four, for example, voted for the Bush tax cut and campaigned as moderates.

The most visible House Republican to lose was Connie Morrella. She had made a career of being a moderate and had voted against the Iraq war resolution.

One important lesson from this pattern is that candidates in an election in which the turnout is elastic may best choose to energize their party base rather than seek switch-over votes; a moderate has an inherently limited potential to energize the party base.

The major outcomes of the 2002 election are a consequence of the fact that the Republican Party was more successful in energizing its party base, in part because the Democratic Party did not seem to stand for anything.

Another lesson is that candidates are more likely to choose an issue position closer to the median of their party than the median of the total electorate. As a consequence, there will be an increasing issue divergence between the major parties.

A third lesson is that it will be more difficult to govern without a substantial number of moderates who are prepared to compromise.

As a consequence, there will be fewer legislative decisions that reflect the genuine bipartisan support that is necessary to ensure that the legislation will survive a change in the dominant party.

As the reader will expect, I'm enthusiastic about the prospect that the first of these patterns will lead to an honest debate on Social Security. I'm less enthusiastic about the implications of the second pattern for the health of the American polity.

William A. Niskanen, former acting chairman of President Reagan's Council of Economic Advisers, is chairman of the Cato Institute, at www.cato.org.

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