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This Is Not a Fight for the Center

May 28, 2000|Robert L. Borosage | Robert L. Borosage is a founder of the Campaign for America's Future

WASHINGTON — The public is already tuning out a presidential race that hasn't even started. There doesn't seem much to choose from: Vice President Al Gore against Texas Gov. George W. Bush, two scions of privilege, St. Albans versus Andover, Harvard versus Yale. The stiff versus the smirk. Both incapacitated on the "vision thing." New Democrat versus New Republican, jockeying for the center.

In reality, more fundamental issues are at play in this election than any since Ronald Reagan's run in 1980. Despite his compassionate refrains, Bush marches to a conservative drum. He supports privatization of Social Security. He embraces vouchers for Medicare, turning that program from a guaranteed benefit to an HMO contract. He favors school vouchers that would use public money to pay for private-school tuitions. His tax plan largely benefits the country-club set, squandering an opportunity for long-overdue investment in education, health care and the environment.

Consider his call to privatize Social Security. Bush says the choice is "status quo against reform" and wants this to be a "defining difference" between the two men. He masks his reform in generalities, reaping praise for his courage while ducking all specifics. But the thrust of his plan is clear: He would carve out private individual accounts by raking off about one-sixth of Social Security payroll taxes. By definition, his plan will cut shared security and increase individual risk. He would reduce the benefits guaranteed for life against inflation and increase the risks individuals would bear in the market.

Bush claims this reform is needed because otherwise Social Security will go belly up by the middle of the century. He plays off widespread fears that the trust fund has been looted, and that the boomers' retirement will break the bank. Three of every four young Americans think they'll get lower benefits than their parents, or none at all.

Reports of Social Security's demise are greatly exaggerated. What Bush admits is the "most single most successful government program in American history" is not broken. If the economy simply grows in the next 50 years as fast as it has in the last 50, Social Security will meet its commitments to the boomers without any reform whatsoever. Even if one assumes, as official projections do, that the economy will grow about as fast as it did in the 1930s Depression years, it will take only manageable changes to fill a shortfall that might arise four decades from now. The actual entitlement crisis is caused primarily by soaring health-care costs, not Social Security.

Bush's privatization would exacerbate the problem he purports to solve: the challenge of paying for the boomers' retirement. Bush reassures seniors and those near retirement that they would retain their guaranteed benefits. But he would take away one-sixth of the money needed to pay for them to create private accounts for the next generation. Bush says he would use the projected surplus to cover the hole. But with Federal Reserve Chairman Alan Greenspan garroting the economy, Bush committed to a major tax cut for the country-club set and more money needed to bolster Medicare, he must be counting miracles, not money.

When asked if people would fare as well under his system as the current one, Bush said candidly, "Maybe, maybe not." Some will and some won't, that's the nature of risk. Widows and the disabled may find their guaranteed benefits cut. Working people may see the fees of Wall Street investment firms eat up large portions of the returns on small accounts. Bush has already conceded he would raise their retirement age to help pay for his program.

Social Security is known as the "third rail" of U.S. politics: Touch it and fry. But Bush believes the stock market has more juice. He seeks to reassure seniors that their benefits are safe, while attracting support from younger voters looking for a chance to get rich. He offers a dot-com market reform of a state program painted as on its last legs. And he benefits from lavish support of a financial community panting to handle 200 million private accounts. According to the Center for Responsive Politics, the financial and banking community has anted up about $5.7 million to Bush's election campaign.

Now, it is a hoary Democratic Party ploy to cry wolf about Social Security and Medicare. But, this time, the threat is real, and a lot of Democrats are part of the problem. Bush has essentially adopted reforms peddled by the money wing of the Democratic Party--the New and Blue Dog Dems. They are already giving him bipartisan cover. If he's elected, they may well deliver Republicans enough votes to overcome a Democratic filibuster.

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