Deal or No Deal?

LOSING the midterm elections may have brought President Bush closer to achieving his goals for Social Security reform. Those goals are to make the program solvent and to expand the “ownership society.”

The elections made a bipartisan deal on Social Security more likely in four ways. First, they increased President Bush’s incentive to cut one. If he wants a domestic-policy legacy, this is the most likely place for him to find one. Second, they increased his flexibility. During the last Congress, many Republicans insisted that any reform had to include personal savings accounts “carved out” of Social Security: Workers, that is, had to be able to take some of the payroll taxes they pay into the system and invest those funds themselves. That idea didn’t get through Congress, largely because Democrats were solidly opposed to “diverting” Social Security money to personal accounts in this manner. Some Republicans still don’t see any upside to a reform that lacks personal accounts. But it is obvious that personal accounts can’t pass in a Democratic Congress, and the White House seems to have tacitly conceded as much—clearing the way for a deal.

About the Author

Ramesh Ponnuru

Ramesh Ponnuru is the editor of National Review, a columnist for the Washington Post, and a fellow at the American Enterprise Institute.

LOSING the midterm elections may have brought President Bush closer to achieving his goals for Social Security reform. Those goals are to make the program solvent and to expand the “ownership society.”

The elections made a bipartisan deal on Social Security more likely in four ways. First, they increased President Bush’s incentive to cut one. If he wants a domestic-policy legacy, this is the most likely place for him to find one. Second, they increased his flexibility. During the last Congress, many Republicans insisted that any reform had to include personal savings accounts “carved out” of Social Security: Workers, that is, had to be able to take some of the payroll taxes they pay into the system and invest those funds themselves. That idea didn’t get through Congress, largely because Democrats were solidly opposed to “diverting” Social Security money to personal accounts in this manner. Some Republicans still don’t see any upside to a reform that lacks personal accounts. But it is obvious that personal accounts can’t pass in a Democratic Congress, and the White House seems to have tacitly conceded as much—clearing the way for a deal.