Pushing the Bush Revolution

...On Social Security, curiously, Schumertakes amore moderate stance...

...Another reason for the President's delay may be the lack of even an outline for broad tax reform...

...The Democratic standard bearer argued—accurately—that the present system will remain solvent for at least another four decades...

...A decade has passed since the GOP came roaring back under Newt Gingrich's "Contract with America," promising a smaller government and a cleansing of Congress...

...the following year, at the earliest, he will advance his proposed changes to the Federal tax code...

...It is not surprising that business groups are already scheming about how to get their hands on people's Social Security contributions...

...So it is unlikely that 2005 will pass without maneuvers on that front...

...I'm not sure we can get it done without Democratic participation because it is a big issue," he said on November 4. "I will explain to them and I will show them Senator Moynihan's thinking as a way to begin the process...

...The election brought the Democrats majorities of 7616 in the Senate and 331 -89 in the House...

...Many Congressional Democrats see Social Security as their party's galvanizing force...

...However, having earned my living as a trader and investment banker for 30 years, and having run one of America's largest financial companies, I understand something about markets...

...Henry Aaron, an aide to President Jimmy Carter who is now a senior fellow at the Brookings Institution, thinks his party has a long way to go: "The real question here is whether the Democrats can learn to behave like an opposition party...

...That would be...

...Not everyone is so diplomatic...

...Some of his advisers want him to name another blueribbon commission to precook a deal by recruiting a critical mass of Democrats before any bill hits the floor...

...Or that a swing of only 21,000 votes in three states—Iowa, New Mexico and Nevada—would have tied Bush and Massachusetts Senator John Kerry at 259 electors apiece (throwing the decision into the House, where Bush would probably have prevailed...

...In his brief remarks about taxes, the President said "the main thing" is that they should "be viewed as fair" and shouldn't "be complicated...

...Discussing general Democratic strategy, Corzine, who chaired the 2004 Democratic Senatorial Campaign Committee and has announced that he will run for his state's governorship next year, says the party must "find the right balance between being challenging and being supportive...

...Two-thirds of all seniors, they observe, rely on the system as their primary source of income, although benefits for retired workers do not on average exceed $ 11,000 a year...

...He has focused his criticism on Bush's 2001 commission, noting that the President appointed only those who advocated privatization...

...In each case, lawmakers would presumably enact protections for the lower middle class and Americans below the poverty line...

...Since Social Security's inception— when a Federal retirement plan was a radical idea on this side of the Atlantic—it has been the most volatile of political issues...

...Fresh from his victory, Bush now dominates the scene...

...Norman Ornstein, a veteran observer of Congress at the conservative American Enterprise Institute, points out that Bush "started his disputed first term as a bold risk taker, initiating major policy proposals as if he had won a landslide victory while facing the most closely divided Congress in 70 years—and he succeeded early on with both tax cuts and education reform...

...He remains skeptical about partial privatization, but suggests he would not rush in to oppose the reform...

...It may have been a tactical error, though, for him to simply defend the status quo...

...The truth is, markets go up, down and sideways—sometimes for many years...

...This President shrugs off unpleasant news and does not lookback...

...But the party fiscal fault lines are not cleanly drawn...

...Never mind that Election Day polls reported 56 per cent of Americans believe the nation remains on the wrong track...

...FDR carried every state but Maine and Vermont, commanding 60 per cent of the popular vote...

...He was not the only naysayer: The Brookings Institution, the American Federation of Labor, the Chamber of Commerce, and the New York Times all inveighed against the plan...

...Similarly, a significant group of Democrats hesitates to join New York Senator Charles Schumer in arguing that the ballooning Federal deficit is "the greatest danger to the economy right now...

...As he also noted on November 4, the sole criterion set so far is that the changes must not affect revenue...

...Republican leaders have already told him he has to exert more hands-on pressure than in the past if he hopes to see either of his announced major initiatives enacted into law...

...The wolf is knocking at the door and President Bush is about to open it," says California Representative Robert T. Matsui, the top Democrat on the Ways and Means Committee's Social Security Subcommittee...

...Unfortunately, Senator Kerry has chosen to demagogue personal investment accounts and has failed to offer his own plan to save Social Security...

...Andrew J. Glass, a longtime NL contributor, is a veteran Washington observer...

...That gave Clinton the momentum he needed to win a second term...

...Composed of eight Republicans and eight Democrats, the panel concluded that for the system to remain solvent it would require "either painful tax increases, significant benefit cuts, or astronomical levels of borrowing...

...He claims to have won a mandate from voters that legislators cannot ignore: "I earned capital in the campaign, political capital, and now I intend to spend it...

...Under his approach, younger workers could divert two-thirds of their 6.2 per cent Social Security payroll taxes into private accounts...

...Failure to stand up and say what you support when it comes to saving Social Security from irnpending bankruptcy is a failure of leadership...

...I can assure you it is pure folly to assume that privatized accounts will always increase in value, and will be at a high water mark at the moment when an individual retires...

...Corzine has countered that the commission's proposals would cut benefits across the board by 46 per cent, since its report envisioned raising as much as $4.7 trillion in new Federal debt by 2041...

...Most Democrats in Congress feel queasy about toying with what has become an American institution—and last year sent out checks to 53 million people...

...But whether they will be able to rally the votes to prevent privatization is unclear...

...That means taking popular stands and not paying quite as much attention to the details, letting the majority party worry about the practicality...

...Talking about the tax code, for instance, he contends that New Yorkers will end up with the short end of the stick under the President's still nebulous tax plan...

...Having been named to succeed Corzine as chairman of the Democratic Senatorial Campaign Committee, Schumer can expect to spend more time countering Bush's initiatives than promoting his own...

...During the Presidential campaign, Bush-Cheney operatives turned to Graham, who is safe from re-election worries until 2006, to attack Kerry as a candidate without a Social Security plan...

...For example, diverting as little as 20 per cent of the dedicated payroll taxes to private investment accounts would require, at the minimum, $ 1 trillion to make up the lost revenue to the current system over a decade...

...He did not mention that during their own campaigns a considerable number of Republicans in Congress pledged to make some, or all, of the 2001 Bush-sponsored tax cuts permanent...

...Omstem cautions, however, that despite the OOP's expanded majorities and the President's freedom from the burdens of electoral politics, he still faces uncertainties on Capitol Hill...

...Some argue that privatized accounts will give seniors better returns," he says...

...In the Senate, Jon S. Corzine of New Jersey has been the Democrats' Social Security point man on the strength of his Wall Street credentials...

...No matter...

...Graham's blast did not make much news at the time, but we surely will hear it echoed if the Democrats do not fall in line in 2005...

...In the Presidential campaign of 1936, shortly after incumbent Franklin D. Roosevelt guided the legislation through Congress, his Republican opponent, Alfred Landon of Kansas, called it "a fraud on the working man," and declared that "the savings it forces on our workers is a cruel hoax...

...In some respects, they find themselves as confounded as the Republicans were in 1993 after Bill Clinton wrested back the Oval Office from 12 years of GOP occupancy...

...Promises to the contrary notwithstanding, benefits are expected to be cut for some future retirees because payouts would be tied to inflation rather than wage growth...

...Beyond that, he will name a bipartisan advisory panel to examine whether Congress should simplify the existing code or whether it should be replaced altogether, perhaps by a flat income tax or a national sales tax...

...So far, the President has not proved himself capable of mustering the bipartisan support needed to make the sweeping changes he envisions...

...There was a burden they faced, and we face: It's not enough to just say what you're against...

...He will almost certainly seek support across the aisle by invoking the memory of Daniel Patrick Moynihan, the late New York Democratic Senator who backed privatization as cochairman of the 2001 commission...

...When you win, there is a feeling that the people have spoken and embraced your point of view, and that's what I intend to tell the Congress...

...Furthermore, the sulphurous partisan atmosphere in Washington these days, particularly in the House, will make it difficult to veer from the status quo...

...One thing they never do is provide guaranteed returns or protection against both inflation and the risk of outliving your savings—only Social Security does that...

...Now, much of the debate about Social Security reform centers on the transition costs...

...It took the Republicans "about nine or 10 months to figure out what their job was as the opposition party," according to Douglas Sosnick, a top political operative in the Clinton White House who played a leading, if late-starting, role in the Kerry campaign...

...While supporting Bush on the war on terrorism and similar vital national security issues, "we need to push back" in domestic areas...

...a huge fight," he warns...

...After capturing control of Capitol Hill and installing the former history professor from Georgia as Speaker of the House, the Republicans overreached when they temporarily shut down Federal services...

...Preventing the impending bankruptcy of Social Security is one of the greatest challenges facing our nation," Graham said in September...

...Thus they hope the issue will enable them to hand Bush a second-term domestic defeat as he grapples with the manifold problems of the American-led war in Iraq...

...And then it took them a couple of more years to figure out how to operate...

...That would entail adding as much as $ 100 billion a year to a Federal deficit already running around $450 billion...

...On the Home Front Pushing the Bush Revolution By Andrew J. Glass Washington At his November 4 postelection press conference President George W Bush, buoyed up by increased majorities in both the House and the Senate, drew the battle lines for domestic reform in his second term: In 2005 he will press for a radical revision of the 70-year-old Social Security system...

...A sizable GOP faction, concentrated in the House, views the President as a big government conservative and is resistant to his budgetary ideas...

...IN HIS 2000 campaign, Bush called for partly privatizing Social Security by giving new entrants to the labor force the option of putting a portion of their theoretically dedicated payroll taxes into private stock and bond accounts...

...Nevertheless, Bush is determined to press ahead and January's State of the Union address will likely reveal how he intends to play his hand...

...I just hope these business groups also consider the explosion in debt that is part and parcel of privatization...

...In so doing, he gave Graham an opening for his rhetorical salvo...

...you have to say what you're for...

...Then, at the outset of his first term, he confidently predicted a decade of Federal budget surpluses, which would provide the extra money needed to initiate his vaunted "ownership society...

...Instead, the budget was soon awash in red ink and the plan never gained traction in the GOP-run Congress...

...Should Wall Street fall into an extended slump, the Federal government would guarantee benefits up to 120 per cent of the poverty rate...

...Bush will probably endorse aprogram along the lines proposed by South Carolina Senator Lindsey O. Graham, who has emerged as the Republican point man on the issue despite his freshman status in the seniorityconscious GOP ranks...

...With Social Security on the table again, imagine what a President could do with such numbers come 2009...

...To date, the Democrats have not had the organization or the discipline to play that role...

...Unlike the tax cuts Bush easily steered through Congress in 2001, bold transformations of Social Security and the Federal tax code were hardly discussed during the long campaign, and the specifics of such reforms have yet to be laid out...