House and Senate leaders should leave the fiscal-year 2006 budget resolution on their respective back burners until this fall. They may need it then to deliver President Bush’s proposed personal retirement accounts.
Social Security choice, the president’s signature second-term domestic initiative, seems to be gaining little ground. If anything, recent polls have recorded a slip in support for the measure since President Bush started to push it energetically last month. As American Enterprise Institute scholar Karlyn Bowman notes, a January 7-9 Gallup poll found that 40 percent of adults surveyed considered personal accounts (coupled with benefit cuts) a good idea, while 55 percent thought they were a bad idea. But among the 1,000 adults Gallup interviewed February 7-10, the “good idea” response had slid to 36 percent, while “bad idea” rose to 60 percent (error margin: 3 percent).
Bush’s proposal has been beset by the usual Democratic claims that this creaking public pension system is just splendid, thank you, and that if any fine-tuning is needed, it can be performed later. And no, such steps should not be delineated at this juncture.
President Bush hindered matters last week by placing on the table an increase in the ceiling on income subject to payroll tax, say from $90,000 to $100,000. The president is negotiating with himself. A major concession like this only should be agreed to around a conference table later this year in exchange for guaranteed Democratic “yes” votes for personal accounts. By signaling that he already might yield on this item, Bush has empowered Democrats to demand even more. Republicans, meanwhile, are growing nervous about a proposal that looks as if it might involve swapping tax increases for…
Well, that’s another problem.
“We’re all really eager to see the president’s plan,” one House GOP backbencher tells me, his voice trailing off in exasperation. Advocates of Social Security choice defend personal accounts in theory without knowing their expected contours in practice.
One hopes that over the next few months, the arguments for Social Security reform will supersede a shrill campaign of invective by the defenders of the status quo. If Americans demand voluntary personal accounts despite the spooky stories about throwing grandmomma from a train, excellent! As the late Senator Everett Dirksen (R., Ill.) once said: “When I feel the heat, I see the light.” Should sufficient Democrats feel warm enough to join Republicans in squelching an anti-reform filibuster, personal accounts should be home free; House Republicans comfortably will deliver on their side of Capitol Hill.
However, Democrats are likely to maintain a filibuster on behalf of the greatest legacy of Franklin Delano Roosevelt, a president Democrats love at least as much as Republicans adore Ronald Reagan.
That’s when the budget resolution shifts to the front burner.
If personal accounts face a Senate Democratic filibuster this fall, they should be folded into the 2006 budget resolution. Under Senate rules, budget resolutions may not be filibustered. They can pass the Senate by simple majority. Assuming that personal accounts are popular enough to garner the votes of 51 senators, they will prevail in that chamber, and easily win the endorsement of the well-disciplined Republican House. At that point, President Bush can arrange a Rose Garden ceremony to modernize Uncle Sam’s largest program.
There is one interesting wrinkle: budget resolutions only cover ten-year periods, so personal accounts would have to operate from 2006-2016.
No worries.
If Republicans invest the political capital to yield personal accounts, Americans should enjoy them immediately, rather than in 2009, as Bush envisions, more than two elections away.
Second, Republicans can give Americans ten years to try these accounts. If they prove unpopular, the initiative could be scrapped in 2016. Much more likely, Americans will cherish the freedom to own and control 4 percent of their 12.4-percent Social Security taxes and will insist on this program’s permanence. A similar ten-year down payment on eternity got Bush’s first batch of tax cuts through Congress.
Simultaneously, a decade-long infusion of an estimated $2.5 trillion in the capital markets will propel the U.S. economy to even greater heights. If President Bush’s tax cuts also can be made permanent, America will be many miles closer to a supply-side nirvana.
If five or more Senate Democrats want to help all 55 Republicans profoundly repair Social Security, their courageous assistance would be most welcome. Barring that, House and Senate GOP leaders need to keep the FY 2006 budget resolution available to carry this vital reform down Pennsylvania Avenue for the president’s signature.
Will this make Howard Dean’s party scream? Maybe. But that’s all Democrats do these days, anyway.