Washington Post: Bush Will Push Social Security Reform

November 26, 2003

"President Bush's aides are reviving his long-shelved plan to let workers divert some Social Security taxes into stocks as a reelection issue," according to Mike Allen, staff writer for the Washington Post. In his following article, "Bid to Change Social Security Is Back," Allen writes that Bush's aides have resurrected the plan for individual accounts as a central theme of his "ownership society" campaign.

"Bush aides said he will make the longtime conservative goal more palatable by discussing changes to Social Security as part of a set of plans encouraging what he calls an 'ownership society' in which minorities receive help buying homes, seniors have a choice of health care, and employees control part of their retirement savings.

"'We are going to do everything we can to encourage a healthy public dialogue about Social Security reform,' a senior administration official said. 'The politics works on this because it is accepted in the general public that Social Security has a long-term solvency problem.'

"A presidential adviser said Bush is intent on being able to say that reworking Social Security 'is part of my mandate' if he wins. Bush made modernization of the retirement system one of the six core issues of his campaign in 2000, but he has said little about it since a commission he had appointed issued an inconclusive report at the end of 2001.

"Aides said Karl Rove, Bush's senior adviser, has argued internally and to the president's key supporters that recent polling and election results show that changing Social Security is no longer the 'third rail of American politics'—death to those who touch it. These aides pointed to the victories in last year's midterm elections by five GOP candidates for the Senate—Norm Coleman (MN), Elizabeth Dole (NC), Lindsey Graham (SC), John E. Sununu (R-NH) and James M. Talent (R-MO)—who made personal retirement accounts a prominent part of their platforms.

"'Those that were dealing with the issue won handily,' the administration official said. Democrats said the candidates emphasized investment choice and the opportunity for gains, rather than the trade-offs or the possibility of losses.

"The public groundwork for Bush's new campaign on the issue began this week. After consulting the White House and the Social Security Administration, Graham on Tuesday proposed a Social Security Solvency and Modernization Act that would keep people 55 and older in Social Security with no changes but would allow workers 54 and younger to contribute as much as 4 percent of their payroll taxes, up to $1,300 a year, into a personal account they would own and control.

"White House officials said Congress is unlikely to move on the issue next year, but they noted that bills such as Graham's will generate debate and serve as a basis for the proposal Bush will advocate on the stump.

"The Social Security Administration plans town meetings with bipartisan pairs of lawmakers next year to call attention to the solvency problems that Social Security will face with the baby-boom retirements and to try to make the case for 'the importance of addressing those challenges sooner rather than later,' spokesman Jim Courtney said.

"The meetings, which will not explicitly push personal accounts, are being staged with the Alliance for Worker Retirement Security, which was founded by the National Association of Manufacturers to promote the idea and is funded by business groups and pharmaceutical companies.

"AARP, the largest seniors organization, is also sponsoring the events. AARP, which says it held similar meetings with President Bill Clinton, favors individual accounts 'only if they are in addition to Social Security,' said John Rother, the group's policy director.

"GOP strategists said Bush's plan should appeal to suburban voters who have little interest in the social issues that motivate his core supporters. Most crucially, these strategists said, it is a way for the party to make inroads among younger voters, who have been shown in polls to be more open to the idea than their parents.

"A Washington Post poll in August found that 58 percent of respondents had savings invested directly or indirectly in the markets, compared with 44 percent six years ago. Bush's aides have long eyed this 'investor class,' which boomed with the popularity of mutual funds, as a key to the party's long-term growth. Polls have shown majority support for individual accounts.

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