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UPI | Editorial | December 3, 2002
Social Security Pledge Failed Democrats
By Will Marshall

Editor's Note: This piece was originally published by United Press International.

WASHINGTON, Dec. 3 (UPI) -- Nothing better epitomized the hackneyed and reactive character of the Democrats' 2002 midterm campaign than "The Pledge."

Like camp meeting converts swearing off demon rum, nearly every Democratic candidate for Congress dutifully took the Pledge. They vowed to never, ever allow working Americans to divert some portion of their Social Security payroll taxes into personal retirement accounts. In leftish circles, this goes by the name of "privatization" and is regarded as the ultimate political thought crime.

And lest Democrats entertain any impure thoughts about reforming Medicare, the pledge also requires them to swear fealty to a new prescription drug entitlement "that will cover all drugs beneficiaries need" and that won't "push beneficiaries into HMOs and other managed care plans."

The pledge is the brainchild of the Campaign for America's Future, a union-backed organization that is to Social Security and Medicare what the Inquisition was to medieval Christiandom. Its latter-day Torquemadas enforce New Deal-Great Society orthodoxy and ferret out heresy with religious zeal.

Their goal is simple: to preserve Social Security and Medicare as nearly as possible in their original 1935 and 1965 incarnations. And with the Pledge they encouraged Democrats to make this profoundly conservative, even reactionary, stance the centerpiece of their midterm election campaign.

Don't believe all the post-election blather about Democrats losing because they had no message. In fact, party leaders could not have been more consistent or coherent, declaring over and over again that the election would be "a referendum on Social Security." Egged on by pollsters and consultants, Democrats lambasted their GOP opponents for scheming to privatize the system.

Hoping to hit a political trifecta, they warned voters not to let Republicans "Enronize" Social Security, neatly tying together doubts about personal accounts to the stock market's tumble and the recent corporate crime wave.

But Republicans, including those in hotly contested Senate races, parried these attacks with ease. Were they for privatization? Not at all -- the private accounts they envisioned would be owned by workers but administered by government. Though disingenuous, this semantic dodge worked.

Convinced that seniors were the key swing vote in this election, Democrats also hammered away at the GOP's stingy prescription drug plans and promised more generous benefits delivered exclusively through Medicare. But Democrats' determinedly "gray" message seems not to have swayed seniors. According to a post-election poll by Greenburg/Quinlan/Rosner Research, Republican candidates won voters over age 60 by five points (51 percent to 46 percent).

And so the 2002 midterm went down as the fourth straight election in which Democratic promises to "protect" Social Security and Medicare failed to wrest back control of Congress from the GOP.

The pledge failed Democrats because it reflects a fundamental misreading of the politics of Social Security. First, as these numbers show, older voters have interests beyond their retirement checks and prescription drugs, and they probably resent being pandered to by politicians who assume their outlook is essentially selfish.

Second, public views on social security increasingly diverge by age. Generally speaking, voters under 50 have doubts about the system's future and are attracted to personal accounts as a way of taking greater control of their retirement security. Older voters are more skeptical of personal accounts and indeed any change that looks like an attempt to change the system's rules just as they're about to retire.

This split explains why candidate George Bush, who made personal savings accounts a key campaign pledge in 2000, could step on the proverbial "third rail of American politics" and not get electrocuted. There's a growing constituency for reinventing the big entitlement programs to reflect trends in the rest of society toward greater individual choice in health care and individual ownership of financial assets like "defined contribution" (such as 401(k)) pensions.

None of this is to say that personal savings accounts funded by payroll taxes are necessarily a good idea, much less a panacea for Social Security's ills as the GOP misleadingly claims. In fact, Democrats' obdurate defense of the status quo lets Republicans get away with murder on Social Security. It allows them to pose as bold reformers and dangle personal accounts before younger voters while avoiding the political risk of specifying how they would actually make Social Security solvent over the long haul.

Personal accounts may be a tool for individual empowerment and ownership, but by themselves they do nothing to close the yawning gap between Social Security's revenues and benefits. Worse, creating a personal account option without making other structural reforms will only make it harder to find the money we need to keep the promises we've made to future generations.

Democrats could say this, but then they'd have to offer their own plan for modernizing Social Security. A progressive approach to retirement security would include repealing -- not raising -- the official retirement age, letting workers decide when to retire and adjusting benefits accordingly. It would probably also include trimming future benefits for wealthy retirees and raising the minimum benefit for low-income retirees. And because we'll all have to save more to retire in the style to which we've become accustomed, it may well entail creating personal savings accounts funded by payroll taxes, general revenues or some combination of the two.

The party also needs a smarter approach to Medicare. Even without a drug benefit, Medicare spending will explode as the baby boomers retire. Many seniors, meanwhile, already have drug coverage and are capable of paying for all but the most expensive medicines.

So instead of promising a lavish entitlement we can't afford right now, Democrats should offer drug coverage to the neediest retirees, plus a new catastrophic drug benefit that would protect all seniors against truly ruinous drug costs. And they should insist that Medicare adopt chronic disease management programs and outcome measures to ensure higher quality health care for seniors.

What's crucial now is that Democrats stop reflexively opposing virtually every serious option for entitlement reform that's put on the table. Instead of a lemming-like rush to placate pressure groups by signing pledges that sanctify the status quo, the party needs to regain its old habit of independent thought and bold policy innovation. Because in the end only Democrats can offer what America urgently needs -- a progressive vision of what social insurance should look like in the 21st century.

Will Marshall is president of the Progressive Policy Institute.