MyDD :: Inventing Reform

Inventing Reform

by Chris Bowers, Tue Dec 07, 2004 at 05:19:42 PM EST

Unfortunately, being out of power does not necessarily allow a political party to claim the reformer agenda. The Great Backlash narrative, which dictates that liberals are always in power because of their supposed control over academia, the judiciary, the media and the entertainment industry, is one problem that we face when trying to become a party of reformers. The narrative presents an imagine of conservatives as outsider reformers no matter who runs Washington or state governments. Another problem is that the party in power can intentionally force a budget crisis in an attempt to increase national popularity for reform that is only popular among conservatives. This is exactly what Krugman argues Republicans are doing when it comes to Social Security:

Privatizing Social Security - replacing the current system, in whole or in part, with personal investment accounts - won't do anything to strengthen the system's finances. If anything, it will make things worse. Nonetheless, the politics of privatization depend crucially on convincing the public that the system is in imminent danger of collapse, that we must destroy Social Security in order to save it.(...)

Projections in a recent report by the Congressional Budget Office (which are probably more realistic than the very cautious projections of the Social Security Administration) say that the trust fund will run out in 2052. The system won't become "bankrupt" at that point; even after the trust fund is gone, Social Security revenues will cover 81 percent of the promised benefits. Still, there is a long-run financing problem.

But it's a problem of modest size. The report finds that extending the life of the trust fund into the 22nd century, with no change in benefits, would require additional revenues equal to only 0.54 percent of G.D.P. That's less than 3 percent of federal spending - less than we're currently spending in Iraq. And it's only about one-quarter of the revenue lost each year because of President Bush's tax cuts - roughly equal to the fraction of those cuts that goes to people with incomes over $500,000 a year.

Given these numbers, it's not at all hard to come up with fiscal packages that would secure the retirement program, with no major changes, for generations to come.

It's true that the federal government as a whole faces a very large financial shortfall. That shortfall, however, has much more to do with tax cuts - cuts that Mr. Bush nonetheless insists on making permanent - than it does with Social Security.

But since the politics of privatization depend on convincing the public that there is a Social Security crisis, the privatizers have done their best to invent one.

Make no mistake. The huge budget deficits that are repeatedly run up by conservative administrations are not just attempts to "starve the beast" and force massive cuts in the social safety net. They are equally attempts to position the conservative agenda as a reformist agenda to the status quo. If they can convince a majority of the population people that the budget shortfall is caused by Social Security rather than by tax cuts they will succeed. Without the reformers, the Republicans would be out of power. Thus, even in power, they need to invent ways to make certain that they can keep this crucial voting block in their coalition. A fake Social Security crisis is one such invention.

Tags: Money (all tags)

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Astounding (none / 0)

It astounds me that the Democratic Party is isn't on top of this stuff, able to respond quickly and to the point, take the initiative when it comes to reform. We certainly have it on the platter right in front of us, if we want to use it.

by Bean on Tue Dec 07, 2004 at 07:55:22 PM EST

What's the answer? (none / 0)

How does one change the media narrative on this subject? How does one show that social security privitization is a solution looking for a problem?

"You say the world has lost it's love I say embrace what it's made of" -Dar Williams

by Valatan on Tue Dec 07, 2004 at 09:05:41 PM EST

You just keep pushing (3.00 / 1)

The first step is to change the narrative on the Left. I have been posting on this since 1997 and continually encounter people who "know" things about Social Security that are simply wrong. This is particularly true among Gen-Xers who have been told since they were children that Social Security was simply not going to be there for them. I see this everyday in the papers, one set of numbers is presented as being objective reality and based on that editorialists and reporters solemnly report that "Social Security WILL start experiencing a shortfall in 2019 and WILL exhaust the Trust fund in 2042" without examination of the numbers or even their past reporting.

In the Eighties it was reported that the Trust Fund would be exhausted in 2023 if nothing was done. Well nothing was done. Now it is reported that the Trust Fund will be exhausted in 2042 if nothing is done. You would think that this movement in the numbers might spark some interest among reporters. How in the face of inaction is the problem getting smaller and more distant? And could the factors that have moved projected Trust Fund exhaustion ahead at a rate of more than a year per year still be operating?

Well the answers may not be blowing in the wind. But they are available by inspection of the Annual Reports of the Trustees of Social Security . Links to individual reports for the last 62 years, breakouts of important tables and figures, and some commentary can be found here Social Security is not broke: by the numbers

I just keep linking people to the numbers. And there has been a shift in the narrative in places like dKos and Eschaton. Now Krugman is elevating it to the big media. We just need to keep pushing.

by Bruce Webb on Wed Dec 08, 2004 at 10:21:31 AM EST
[ Parent ]

It's the media, stupid (none / 0)

Great post, to which I'd add only that the reason so many, even on the left, buy the lies about Social Security, is that lies are the only thing the media has sold us for the last quarter century or so.

This is only tangentially about "framing" and the like. We can "reframe" until evil is eradicated from the planet and we won't win if we can't get the truth, however framed, out to the people. We are combating yet another Big Lie campaign, just as with Medicare, Iraq, etc., and the only reason we keep losing is that most of the media is on the liars' side!

Incidentally, something was done to Social Security in the Eighties: the retirement age was raised for future retirees such as myself, among other things. But the gist of your post is still spot on.

If you're always playing the fear card, it's a pretty good sign you're not playing with a full deck!

by Mathwiz on Wed Dec 08, 2004 at 01:16:05 PM EST
[ Parent ]

1982 (none / 0)

It was done in 1982, and in retrospect seems to have solved the problem. But at the time it was considered a half-measure, a first step, and the predictions of shortfall in 2023 came years after the Reagan/Moynihan reform.

by Bruce Webb on Thu Dec 09, 2004 at 09:07:14 AM EST
[ Parent ]

starting to pick up steam (none / 0)

check out paul krugman's piece in the ny times op ed section to day about a fake crisis. social security is solvent until 2050 according to him and even then not far into the red.

by louver15f on Tue Dec 07, 2004 at 10:16:26 PM EST

so what's the alternative (none / 0)

just throw up our hands and say, "oh, well, we are going to lose?" The fight is necessary even if we don't win because to do nothing is to let these idiots ruin our country.

by mrgavel on Tue Dec 07, 2004 at 10:18:36 PM EST

The Daily Howler is on the attack as well (none / 0)

Yesterday, December 6th linked text and today, December 7th.

Somerby also links to a series of Social Security posts about lame media coverage in 2002:

SOCIAL SECURITY SOMNOLENCE WATCH! Once again, Soc Sec is up for review. Will the press corps again try to nap?

Our current howler (part I): (05/14/02) linked text

Social Security will drive the campaign, Lambro says. And Bush's plan has an upside: free money.
Our current howler (part II): (05/15/02) linked text
There were ways to examine the candidate's plan. The press made a point to avoid them.

Our current howler (EXTRA): (05/15/02)
We live in very stupid times. Ann Coulter finds a new way to prove it.

Our current howler (part III): (05/17/02) linked text
Bush's basic pitch had a great big problem. And guess what? The corps didn't care.

Our current howler (part IV): (05/20/02) linked text
Did pundits fashion a great debate? Howard Fineman reviewed Bush and Gore's wardrobes!

I haven't gone through all of them yet, but it looks like the media is gonna roll over on this one and play the "he said she said" game.

by Gary Boatwright on Wed Dec 08, 2004 at 01:13:32 AM EST

More support at tompaine (none / 0)

A short article by Dean Baker linked text
Social Security is not in crisis

by Gary Boatwright on Wed Dec 08, 2004 at 03:23:24 AM EST
[ Parent ]

Excellent article in TNR by Noam Scheiber (none / 0)

(free registration) linked text

Ultimately, the effort to "reform" Social Security could end up looking a lot like last year's effort to "reform" Medicare. ...

Then, to make the numbers work out, the GOP will once again cook the books--this time exploiting a quirk in the way the Social Security actuaries evaluate the solvency of the trust fund. (The actuaries only consider whether the trust fund has enough money to pay benefits, not where the money comes from; the GOP can simply propose borrowing trillions of dollars from the rest of the federal budget and the actuaries will be forced to sign off.) And, of course, the GOP will take care to reward this year's choice interest group--the securities industry--on which it will likely rely to make the final lobbying push on the Hill. (According to a recent University of Chicago study, the securities industry could reap up to $10 billion a year in fees from administering private accounts.)

The only real difference between last year's Medicare reform and the likely outcome of Bush's second-term Social Security reform is that the economic consequences of the latter could be far, far more severe. Bond markets and currency traders assume the government will eventually take the steps necessary to prevent Social Security from bankrupting the country. A plan that moves in the opposite direction by issuing trillions of dollars in new debt without any meaningful long-term cuts would shatter that assumption, driving down the value of the dollar, driving up interest rates, and potentially triggering a deep recession. Then again, what's a little economic crisis when your legacy is at stake?

by Gary Boatwright on Wed Dec 08, 2004 at 05:00:47 AM EST

Social Security (none / 0)

I think the CBO's report was overally optimistic. Moreover, a pay as you go system is incredibly inefficient. I don't see why Dems should be against allowing people to invent a rather small amount of their SS contributions.

But the Reps want it both ways. Contributions may not be a terrible idea, but it isn't revenue neutral, and you have to pay for it. Trying to combine this with their irresponsible tax cuts is simply gross negligence.

We can talk all we want about winning elections by trying to convert people to liberalism or to find new liberals that don't vote yet. I'm not sure this is more than just wishful thinking, because to the extent we pull to the left and add voters that way, we just bleed them off on the right of the Dem party.

However, we have a real opening that would definitely add voters: becoming the balanced budget party. The Reps have given this away, and it is just sitting there for the taking. We seize this opportunity, and it would make it a lot easier for us to be progressive in other areas with the credibility we gain from being the party that doesn't break the bank.

by alhill on Wed Dec 08, 2004 at 11:05:28 AM EST

Re: Social Security (3.00 / 1)

I think the CBO's report was overally optimistic.

Why? Do you prefer SSA's belief that GDP will grow at the anemic rate of 1.4% per year - worse than during the Great Depression - for the next 35 years or so?

Moreover, a pay as you go system is incredibly inefficient.

Over 99% of SS taxes go to benefits and reserves. On what planet is that "incredibly inefficient?" SS works like every insurance company on the planet: collect premiums or taxes, invest some for reserves, and use the rest to pay claims or benefits, cashing reserves as necessary. If that's so "incredibly inefficient," why hasn't every insurance company on Earth gone bankrupt long ago?

I don't see why Dems should be against allowing people to invest a rather small amount of their SS contributions.

Because it would make SS less solvent, not more so. This is the whole GOP con! Take a system that works, but has a possible problem developing decades hence, blow that problem totally out of proportion to reality, then use the manufactured "crisis" to push a "solution" that actually makes the problem worse! It's exactly like what they did with Medicare last year. Please go read the Dean Baker article linked above.

Besides, people can already invest in tax-sheltered IRAs, 401(k)s, etc. If you feel those are inadequate, why not expand them rather than screwing up a successful program?

If you're always playing the fear card, it's a pretty good sign you're not playing with a full deck!

by Mathwiz on Wed Dec 08, 2004 at 01:04:06 PM EST
[ Parent ]

inveting reform (none / 0)

Chris is advocating a fantastic idea. Reforming the process is a way to co-opt GOP rhetoric in ways that liberals like rather than in ways that makes them quesy, like embracing the military and cultural issues that swung voters in 2004.

p.s. Chris, Dont't write off the South as a home for idependent reformer. In an earlier post your maps backed your claim that the South is where 3rd parties go to die. I know it was a long time ago, but in the 1890s the Populists did very well in the South in state and congressional races. They did it by putting economic issues ahead of race (of course, they got beat by race baiting in the end, and disfranchisement quickly followed, which helps to explain one-party rule thereafter).

by history prof on Wed Dec 08, 2004 at 01:04:40 PM EST

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