Make no mistake: Social Security does indeed face a grave threat — only, it is not the ticking demographic time bomb that the program’s critics assure us will blow the boomers’ retirement to smithereens. The real threat comes from the critics themselves, who are all but frothing to destroy the system in order to save it. Based on worst-case projections of national economic growth, they have announced that the system will go into the red 34 years from now. Based on best-case projections of stock performance over the same 34 years, they have argued that downsizing the program, so that everyone can redirect their wages into the market, will guarantee a national bonanza. How stocks can soar while the broader economy limps along — for a third of a century, no less — is a conundrum they don’t address.
But the architects of the many schemes for privatizing our most successful government program are not easily daunted. In recent years, establishment commissions and centrist senators galore have called for reducing the Social Security payroll tax and mandating workers to invest their wages in stocks or bonds — or Taliban oil, or British beef (high-risk, but correspondingly high-yield). To further reduce the collective obligation assumed by the state, they’ve also suggested raising the retirement age at which one can collect Social Security to 68 or 70 (a big favorite of construction and assembly-line workers, not to mention waitresses), and lowering its annual cost-of-living increases.
What you’d never know from Social Security’s critics — some of whom are funded by brokerage houses that will make out nicely if the law mandates the establishment of 140 million new private retirement accounts — is that the current system is the most effective anti-poverty program in America today, not only lifting tens of millions of senior citizens out of poverty but relieving tens of millions of their children from having to support them. What they don’t mention is that the current system is a huge stabilizer in the event of a economic downturn, a guarantor of continuing consumption. What they neglect to report is that the cost of administering the current dinosaur of a system is 1 percent of all Social Security revenues, and that the cost of administering all those private accounts is sure to be many times that.
And what they always omit is that there are solutions for Social Security’s problems that don’t require dismantling the system, or keeping Grandma waiting tables for five more years. In a new report from the Economic Policy Institute, economist Dean Baker suggests that the system could be made sound for the next 75 years by implementing a revision of the Consumer Price Index, increasing the payroll tax by 0.02 percent to account for longer life expectancies, and raising the cap on payroll taxes to 90 percent of wages.
But progressive reforms such as those that Baker suggests are hardly going to win the support of the Republican Congress — although they’re quite likely to win favor with such core Democratic constituencies as labor and minorities. On December 3 — several years after the right began its steady drumbeat against continuing the current system — the AFL-CIO and other liberal organizations are unveiling a national campaign against privatizing Social Security. With the battle thus joined, only one crucial party remains to be heard from: Bill Clinton.
At first glance, you’d think the last thing Clinton would want to do would be to go against the Democratic base on an issue of immense magnitude, just weeks after that base turned out in numbers surpassing all expectation to deal the Republicans a decisive defeat at the polls. You’d think the last thing Clinton would do would be to cut a deal with the Republicans when every poll fairly screams that the public trusts the Democrats, not the Republicans, to modify the system in an equitable way.
Then again, Clinton has flouted core Democratic constituencies before — supporting NAFTA and the Republicans’ decimation of welfare. He has already conceded the right’s argument that the current system is fundamentally imperiled, though projections of budget surpluses far into the future have rendered this threat as much a matter of faith as of hard numbers. He has nodded attentively while champions of privatization have made their case, though these cases were made at town meetings that antedated the stock market’s wild summer gyrations.
In fact, I haven’t spoken with a single Washington insider committed to preserving a fully governmental Social Security system who is confident that Bill Clinton shares that sentiment. They think he understands the economic, social and political logic of preserving a universal system free from the vagaries of the market. But this is Bill Clinton, and they’re just not sure.
Which is where impeachment rides to the rescue. Nothing would so completely derail the bipartisan dismantling of Social Security than the Republicans’ putting Clinton on trial in the Senate; nothing would make it more difficult for Clinton to sell out his Democratic supporters. All in all, impeaching Bill Clinton seems a small price to pay for perpetuating the most successful Democratic program in the nation’s history.
Besides, if Clinton does move to privatize Social Security, he deserves to be impeached.
In the end, of course, the Republicans will probably wuss out and decline to impeach the president. But Democrats can always hope.