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Feature
Split Personality
What the Republican divide over Social Security means for the future of entitlement reform. Our November cover story, “It’s GOP Gut-Check Time.”
(Page 2 of 4)
Once in office, Reagan did propose some cuts to Social Security and Medicare, including a freeze in cost-of-living adjustments in 1985. Many political analysts argue this helped cost Republicans control of the Senate in 1986. But he didn’t try very hard to get them passed. When Social Security faced the first of its many crises in long-term solvency in the early 1980s, Reagan went along with a conventional patchwork approach that emphasized payroll tax increases over any systemic reforms. He won reelection by almost as big a margin as Lyndon Johnson beat Goldwater 20 years before (in fact, Reagan did better than LBJ in the Electoral College).
Even the Reaganized Republican Party generally exempted Social Security, along with military spending, from budget cuts. This did not stop the Democrats from perennially attacking the GOP on entitlements, butit did prevent most Republican presidents and Congresses from tackling serious reform. For good reason: Franklin D. Roosevelt crowed that “no damn politician” would ever be able to touch Social Security. It became known as the “Third Rail” of American politics.
After the 1994 Republican congressional takeover, Newt Gingrich’s Republican revolutionaries went along with the promise to never cut Social Security benefits. But they did propose a reduction in the growth of Medicare spending. Democrats quickly pounced. Gingrich was said to want to let Medicare “wither on the vine” (an out of context quote of a characteristically bombastic Gingrich statement). Democrats pointed out the $270 billion the Republicans sought in Medicare savings was awfully close to the $245 billion they had proposed in tax cuts.
The narrative became that Republicans wanted to cut Medicare to pay for tax cuts — for the wealthy, natch — rather than to shore up the program’s solvency. Bill Clinton won reelection in 1996 as a protector of Social Security, Medicare, Medicaid, education, and the environment. In his second term, a bipartisan commission entertained some sound ideas for reforming Social Securityand Medicare. But there remained a bipartisan reluctance to tackle the issue, even though the economy was booming, the baby boomers were still in their peak earning years, and the political conditions were theoretically in place for reform.
In 1999, however, the Clinton administration did come up with a Social Security plan of sorts. The proposal was to redirect two-thirds of the expected budget surplus over the next 15 years — an estimated $2.7 trillion — to the Social Security trust fund. To increase the rate of return, Clinton also proposed investing 20 percent of this additional money in the stock market. Stock market holdings were to be limited to less than 14.6 percent of the trust fund’s holdings.
GEORGE W. BUSH, the frontrunner for the Republican presidential nomination, had a bolder free-market reform plan. He wanted to partially transform Social Security into personal investment accounts, letting individuals rather than government reap the market returns. In exchange for forgoing some traditional benefits, younger workers would be able to divert some of their payroll tax contributions into personal accounts which, unlike their Social Security taxes, they would actually own.
Bush was attacked from both the left and the right, as Democrats demagogued and Republican entitlements schizophrenia manifested itself. Gary Bauer, a pro-family activist then running against Bush for the GOP nomination, said that senior citizens “ought to fear” any “privatization plans that say that current workers can all withdraw their current payments.”
“It’s the current payments that’s paying the checks of current retirees,” Bauer continued. “I will preserve the Social Security system. It’s worked well and it’s served the elderly in this country.” (Bauer favored an immediate 20 percent cut in payroll taxes in exchange for a 20 percent cut in benefits.)
John McCain was more mixed. He essentially sided with Al Gore on the “lock box” and backed putting more of the projected surpluses into the Social Security trust fund. But he also endorsed the idea of letting younger workers have personal accounts. ”The only way to increase the yield on Social Security dollars is by allowing workers to make investment decisions for themselves,” McCain remarked in June 1999. Steve Forbes also supported personal accounts, though his plan would have allowed workers the choice of remaining in the current system.
It seemed as if the schizophrenic Republicans had finally crossed the Rubicon on entitlements. Bush won the nomination and the 2000 election against a Democratic opponent who pounded away at personal accounts as “stock market roulette,” “gambling with retirement,” and, that perennial Gore favorite, “a risky scheme.” John Kerry also hit Bush on personal accounts to little avail in 2004. After being reelected with a majority of the popular vote, Bush was ready to start out his second term with a detailed partial privatization plan for Social Security.
Then the old Republican double-mindedness on entitlements once again reared its ugly heads. Social conservative leaders — including some who had shared Bauer’s skepticism of Bush’s reform ideas five years ago — protested that the president should instead be spending his vaunted political capital on the social issues helped him win a second term. Even Democrats from red states felt there was little political risk in opposing Bush on Social Security, while swing state Republicans were unconvinced it was time to grab the third rail.
SINCE BUSH’S Social Security reform failure, the GOP has returned to being a house divided on entitlements. Republicans aggressively attacked Obama for trying to cut Medicare in order to pay for his own health care reform law despite warnings such tactics would undermine their message on entitlement reform later. GOP leaders and strategists offered several defenses for their move.
Republicans pointed out that Obama was not addressing Medicare’s unfunded liabilities, because he was double-counting the savings and actually using them to pay for a brand new entitlement. They noted that Obama’s Medicare cuts would be achieved through reducing payments to doctors, thereby increasing cost-shifting, and rationing care rather than any fundamental reform. Republicans also argued that Obama wasn’t sheltering current beneficiaries from his cuts.
Privately, many Republicans acknowledged that they were willing to use any means necessary to defeat Obamacare. The legislation was a permanent, unconstitutional increase in the size, cost, and power of the federal government. Republicans argued that its cost-savings assumptions were wrong and it was likely to make the existing entitlements crisis much worse. Finally, Medicare was already an established fact while there was still a chance of stopping Obamacare.
Obamacare passed. But Republicans did manage to capitalize on older voters’ anti-Obamacare backlash in the midterm elections. The GOP won the 65-and-over vote by an eye-popping 21 points in 2010, after splitting this bloc evenly in 2006. That’s 13 points better than Republicans did with seniors in the 2008 presidential race with a senior citizen at the top of their ticket. Elderly voters swung important races. In New Hampshire, Republican Kelly Ayotte won them by 33 percentage points. In the race for Obama’s old Illinois Senate seat, Republican Mark Kirk won older voters by 22 points. Even Christine O’Donnell, who went down to defeat in Delaware, carried this group by 11 points.
About the Author
W. James Antle, III, author of the new book Devouring Freedom: Can Big Government Ever Be Stopped?, is editor of the Daily Caller News Foundation and a senior editor of The American Spectator. You can follow him on Twitter @jimantle.
Letter to the Editor View all comments (22) | Leave a comment
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Jack in Wi| 11.21.11 @ 9:12AM
The only Republican who has a plan to save Social Security and Medicare for our present elderly and to give young people an option to opt out is Ron Paul. His proposed budget would cut 1 trillion from the buget in 1 year and not put our elderly and poor out in the street. The military, foreign aid, and numerous Deptments and regulations have to be cut before one penny is cut from our entitlements in this depession. Cut the Federal workforce and Federal pensions, before we cut Social Security. Naturally in this whole article there is not one mention of Ron Paul, who has a detailed plan. Has been candidates like Michelle Bachman, and Rick Perry are given prominent features but the one man who has an actual plan and the guts to push it isn't mentioned. Get Ron Paul's plan on line and read it for youselves. Nobody else has one but Paul Ryan and he isn't running. Ryan's plan would lead to huge electoral losses for the Republicans among the elderly and poor. It was written to protect the elitess from taxes and the military and other deptments from needed cuts.
I notice Mr. Antle did not mention last weeks favorite flavor Newt Gingrich. I guess no-one in his right mind wants to mention him any more. Lets see if we can somehow inflate the deflated balloon Perry once again. Well all the Kings horses and all the Kings men could not put that Humptey Dumpty together again.
Drunken Sailor| 11.21.11 @ 10:48AM
"The only Republican who has a plan to save Social Security and Medicare for our present elderly and to give young people an option to opt out is Ron Paul."
Bullshit. Paul Ryan said the same thing. Paul may be the only canidate getting that word out there and that may be what you meant (though I doubt it). But Ryan has been the most vocal Republican.
Purpleguy| 11.21.11 @ 10:44AM
Private accounts? O h, you mean like the switch from defined benefit pension to defined contribution pensions (401k, etc.) ? Yeah, I want my Social Security at the whim of the market forces - NOT. Social Security Insurance is just that - insurance, not a pension. Everyone pays into it and everyone is entitled to their insurance against poverty in their retirement.
If the Billionaires and Millionaires want to pay more taxes, remove the cap to Social Security and solvency is assured forever. Modify the age of attainment, if you must - otherwise, leave Social Security alone.
SUBVET| 11.21.11 @ 2:19PM
Jackentroll.......Ron Paul has as much chance being elected as Jessie Jackson. When the dust settles in 11 months you have to pick the canadate that can beat barry. Stand back and ask yourself who might that be........not Paul.
Wayne| 11.21.11 @ 9:12AM
This is a foolish time for the GOP to talk about social security. Obama did not create it. The problems we are having now are do to the crazy spending of Obama and the Democratic cronies. Undoing all of Obama's spending activities needs to be the GOP focus. Then start thinking about cutting needless bureaucracies. But don't alienate millions of seniors before the 2012 election. That plays into Obama's reelection strategy.
C Bowen | 11.21.11 @ 6:37PM
Paul TARP Ryan?
Are you joking? He has no plan to balance the budget, even in 10 years! Yet, he still wants to cut bennies. The calculus of his politics are suicide.
Ron Paul on the other hand, has an actual method to balance the budget in three years and protect the payments for the meantime, while letting younger folks opt out.
Clint| 11.21.11 @ 5:53PM
Dr.Ron Paul Had A Social Security Plan In The 2008 Election.
Throughout his 2008 campaign Ron Paul repeatedly outlined a solution to the problem that gives both the Democrats and Republicans reason to smile. Paul proposes to utilize some of the massive amounts of money saved by switching to a non-intervention foreign policy to help those people currently dependent until the programs can be phased out over a long period of time. He would let the younger people immediately opt out of the program. The approach is a sensible and gradual approach.
Margie| 11.21.11 @ 3:12PM
Paul Ryan is Presidential material. I hope he runs for the office one day. A fine man is he.
Timothy L. Pennell| 11.21.11 @ 9:21AM
The PROBLEM is that Congress has been STEALING THAT MONEY, for Generations. They still are. How do we "FIX" Soc. Sec. if we're not gonna do anything about THE PROBLEM?
Clint| 11.21.11 @ 11:10PM
" Ron Paul is surging, an Iowa and New Hampshire front-runner and powerful third-party possibility
By Brent Budowsky - 11/21/11 10:04 AM ET
There are now multiple polls that show Ron Paul has gained support and has a legitimate chance to come in first or second in Iowa and New Hampshire. I would now call Ron Paul one of three front-runners in both Iowa and New Hampshire alongside Mitt Romney and a third candidate, currently Newt Gingrich. If Ron Paul wins Iowa, which he might, all bets are off. Also, most analysts miss the fact that many states have open systems where independents, and in some cases Democrats, can vote for a Republican nominee. This could give a further boost to Paul."
The Tea Party Rebellion Is Here & In Iowa.
W| 11.21.11 @ 5:50PM
We should have a choice whether we want our own private IRA or the SS program.
I prefer to invest it myslef. If you want the feds, who invested in Solyndra, to manage your money, then that is your choice. But if Hillary, who turned $1000 into $100,000 in a year, was managing the money I might reconsider.
It is called insurance but it is not insurance. You are not guaranteed either a return or any amount. You are guaranteed only what the Gov can afford to pay when you retire.
The cap on taxable income for FICA will be raised, but his will hurt employers who have to match the employee's 7.5%.
Jack in Wi| 11.21.11 @ 4:30PM
Romney and Gingrich are both un-electable. Neither one of them will attract the young, Independent and disgruntleed Democrat voters necessary to win a national election. No war pro-banker Republican can win. The vast majorty of voters want our of these foreign wars, and foreign aid. They want Social Security saved and the troops home. Obama will promise them both. That he won't deliver won't matter when you have people like Newt and Romney running. The only guy who polls well among the Independents, Young and disgruntled Democrats is Ron Paul. He beats Obama by 10 points.
Notary Sojac| 11.21.11 @ 10:14AM
Actually, that's not the problem. The problem is that the money they stole is gone.
The question is, do we replace that money through benefit cuts, through tax increases on younger workers, or on a combination of both...
Dave | 11.21.11 @ 9:13AM
Speaking of Mitt ...
One of my favorite writers is Ann Coulter. I love her thinking process and style. Wrapped into her basic smartness is a razor sharp wit that helps slice through some of the grammarian feldergarb that occasionally dots the landscape of political commentary. In a nutshell, like her or not, she writes in an easy to understand, street level style, punctuated with that snappy sense of humor. And while I agree with most of her takes, it sometimes comes with a raised eyebrow.
A few days ago, Ann wrote a column on the recent surge in popularity of Newt Gingrich. She brought out some old skeletons that had been left hanging in his closet and laid them out for some critical rethinking. At the end, there was a lot more for we among the old schoolers to consider before interrogating the new boyfriend.
While I approve most of Annie's style choices, I'm kind of like a concerned dad who occasionally gets nervous about some of the boys she dates. And I'm afraid this Mitt Romney kid might be another Eddie Haskel. At first blush, he's a guy who always wears a proper tie, claims he loves baseball (maybe the Red Sox), but tends to grin big a little too much. When he shows up on TV, I usually spritz the air with a can of pine scented Glade to get the lingering whiffs of Old Spice out of the room. Then there was that other one she had a crush on a few months ago. I think his name was Chris Crispy or ... Christie. He wasn't the slick dresser the Mitt kid is, and was a few pounds on the portly side. Still, he was clean cut looking in an I just shampooed sort of way. He also had the obligatory Peposident smile. Unfortunately, the extra chins around his neck made it tough to tell which side of his face he was talking out of. That's a big red flag.
I'll always love Annie, but her choice in men sometimes leaves me wondering if I might be on the wrong track. I suppose the good news is, neither of these latest crushes are apt to end up sitting in the pews of some hate mongering community preacher, ranting about how God ought to be damning the country, and inciting anarchy in the streets of downtown Mayberry.
I realize Annie will have to live with her choices. And I hope she ends up with one that won't break her heart after the dance. Having a few lessons stashed my senior belt, and always concerned about her well being, I'm afraid this latest crush might, sooner or later, drain her spirit in the same way that kid from Kenya sapped a lot of spirits over the last three years. I knew that guy was bad news from the git-go, but had some difficulty convincing others along the street to keep a close eye on him. What concerns me today is that while the Kenya kid and his posse ended up trashing the neighborhood in short order, these assorted Mitt's and Christie's would probably leave the neighborhood in, pretty much, the same condition. It just might take them a little longer.
Meanwhile, the guys I'd hoped Ann might go the dance with were, one-by-one, kicked out of the campus glee club and relegated to eat their lunches with the school's great unwashed. Or as they're known among the cliques: the uncool kids. When you take time to sift through the pecking order of desirable choices, too often the kids riding skate boards can't match up with those who's daddy's bought them a Benz.
In the end ... the heart wants what it wants. I only hope Annie doesn't regret what she wished for. I suspect we all do.
Quartermaster| 11.21.11 @ 6:36PM
I would like to think the US voter isn't stupid. Alas, the US voter has proven time and again they are morons.
Never, never, never overestimate the intelligence of the US voter. All they see is what they want, and are listening to see who will give it.
topeka| 11.22.11 @ 12:37PM
... not morons... at least not most of them.
They are brainwashed - which is worse.
A moron will often stop hurting other people when they scream, and they usually have the wit to pull their finger out of a socket when it shocks the begebus out of them.
The brainwashed will not do the first and cannot do the latter. That's the difference.
TrueBlue| 11.21.11 @ 3:11PM
Honestly the Repubs don't even really need to talk entitlement reform during the 2012 elections, just point to all the massive cuts that Obamacare does to their current Medicare and Medicaid that most people don't even realize are in the bill. Get rid of that as soon as they're in, THEN they can start talking reform.
At that point it's a matter of having the guts to get done what needs to get done without concern for re-election. Sadly that won't happen because the majority of politicians are career folks that have never had a private sector job, so they wouldn't know where to go for work next.
Peppermint Tea| 11.21.11 @ 9:45AM
Antle has shown the Republican reluctance to address the problem. Ditto the Super Committee. The problem is not in the politicos, it is in ourselves. We want smaller government AND continued government Soc Sec checks!
This will continue until we realize Uncle Sam has been lying about the Cost of Living inflation (see shadowstats.com) and will continue to do so until the Soc Sec payments are worth a fraction of what they were just 10 years ago. The decline of the dollar "SAVES" social security as the boomers retire with worthless dollars. All hail the dollars decline! The fix for everything!
But of course the dying dollar is a mirror of our dying nation. Read "The Great Depression Checklist" chapters about the endgame.
1ConservativeUSA| 11.21.11 @ 10:28AM
Romneycare is a problem, but I will take Mr. Romney at his word that he would repeal Obamacare if elected. My big problem with Romney is that he is proposing false reforms to "save" Social Security.
Means testing, raising the retirement age, raising the workers contribution tax to Social Security, rasing the tax burden on Social Security benefits and government control of inflation increases to benefits are ALL FALSE REFORMS.
Worse, these are property and liberty stealing mechanisms of the federal government, which desperately wants to retain control of Social Security funds, hence retaining control over the governed.
Ronald Reagan, may God bless his soul, has the blemish of kicking this can down the road as he "saved" Social Security by raising the retirement age. Let this be a lesson that it did not work.
I will excuse president Reagan for this error, first because we all make them; second, because he contributed significantly towards our liberty and prosperitry by governing based on his core belief in our founding principles.
The only real reform, the only reform that ensures Social Security will be saved, and most important, the reform that will reduce government spending while returning property and freedom to We the People, is private Social Security accounts.
No conservative should support anything else.
Naturalborn Texicanette| 11.21.11 @ 10:37AM
"Has beens", huh..........................
It Ain't over yet.......................
Margie| 11.21.11 @ 3:15PM
And the simple mind of Man can understand that.
c. j. acworth| 11.21.11 @ 6:58AM
Somehow a bridge strategy must be formulated to transition the country from SS as currently instituted to a system of private accounts. IRA's were the first brick in that bridge, or so I thought when I started mine back in the days of St. Reagan. I understood that as my personal account grew, my dependence on SS would shrink, so if benefits were cut or the system went bankrupt when I hit 65, I would still be OK. Conservatives need to be very clear that grandma is not going to be left twisting in the wind, but that the younger you are, the less you can expect from your fellow taxpayers in the future. Unfortunately, that means instilling a sense of personal responsibility in people who have been told since they were infants that they are God's gift to the world and deserve to have everything handed to them on a plate. It's getting awfully hard to remain optimistic.