June 1 (Bloomberg) -- Yesterday, President George W. Bush promised that his strategy for selling his now sinking Social Security private accounts proposal will eventually cut through opposition ``like water through a rock.''

Perhaps a more fitting water-related metaphor for Bush's proposal could be found at the end of the movie ``Annie Hall'' when Woody Allen, as Alvy Singer, declares: ``A relationship, I think, is like a shark. You know? It has to constantly move forward or it dies. And I think what we've got on our hands is a dead shark.''

The White House moves quickly from a 60-day Social Security roadshow to vague hints about ``add-on'' private accounts to even blessing House Ways and Means Committee Chairman Bill Thomas's efforts to broaden the discussion. The Bush administration knows too well that if there is even a temporary pause, someone might notice that dead shark.

When that moment of realization comes, the White House will certainly blame Democrats for being unwilling to negotiate on private accounts for purely partisan reasons.

Bush said at a White House press conference yesterday that he recognized there was some opposition to his plan. ``I'm not surprised that there's been some initial push-back, but all that does is make me want to continue to travel and remind people that Congress has a duty to come up with some solutions,'' he said.

Wrong Vehicle

Conservatives claim they simply want Democrats to come forward with their own positive ideas on Social Security. I drew a couple of pats on the back from them for proposing a three-part framework calling for no debt increases, a 3 percent surtax on any income exceeding $200,000, and a Universal 401(k) with matching credits to low- and middle-income savers. Yet, I still won't be spared the politicization charge because of my opposition to both ``carve out'' and ``add-on'' private accounts.

What non-political reason, I am often asked, could there be for someone like myself who supports Universal 401(k)s outside of Social Security to so stubbornly refuse to even consider private accounts within Social Security?

The answer is twofold. First, Social Security is simply the wrong vehicle for pushing the worthy and important goal of increasing ownership and savings among working Americans. In our three-legged retirement system -- which includes market-sensitive private savings, home equity and pensions -- Social Security is the only leg free of market and economic risk.

When communities were devastated by corporate scandals or bankruptcies in 2001 and 2002, many families saw not only their pensions dissipate, and retiree health benefits evaporate, but even their housing values decline as their hard-hit neighborhoods spiraled down.

Private Accounts Overvalued

The only part of their financial package that didn't join this spiral was Social Security. With privatization, those families would have seen their Social Security benefits drop, as well. That is why those of us who support new investment incentives like Universal 401(k)s should be the ones most adamant about the importance of keeping the Social Security leg of our retirement system completely risk-free.

The second substantive rationale for a hard ``no'' on privatization is that virtually every private-account plan is designed to make Americans undervalue the social-insurance benefits of Social Security and overvalue their private accounts.

Foolish Comparison

To see why, imagine a father who decides to invest $5,000 in the market and $5,000 in a combination of fire insurance, life insurance, and auto insurance. After one year, he happily notes that his market investment has risen 6 percent. Yet, because he neither died, saw his house burn down nor experienced a serious auto accident, he concludes he got a negative annual return on his $5,000 insurance investment and, therefore, cancels all of his insurance policies.

Of course, this father would be a fool. No rational person measures the value of insurance by an annual return. Yet, when Bush tells Americans to compare the return on their private account with the return they get with a Social Security system -- which provides valuable insurance against poverty, devastating disability, and the early death of a provider -- he encourages exactly that foolish comparison.

Bush leads Americans to ignore the value that goes to the recipients of survivor and disability insurance -- almost a third of all Social Security beneficiaries -- and the almost 100 percent of workers who can go to bed knowing that if such misfortune occurs, Social Security will help their families maintain a modicum of economic dignity.

The White House's Hope

Bush's plan is designed to even further exacerbate this false comparison. By requiring borrowed funds for private accounts to be paid back not from the accounts themselves but by reducing Social Security benefits, his plan is designed to make private accounts seem deceptively large and Social Security benefits appear deceptively small.

This absurd design serves only one purpose: to encourage the healthy and the well-off to misconstrue Social Security as a bad deal.

The White House's clear hope -- and progressives' fear -- is that this will be the first step to transforming a Social Security program that has been a unifying compact between all Americans into a private-account plan for the fortunate and a politically weak welfare program for the elderly and disabled.

Avoiding this slippery slope before it starts is substantive reason enough for Democrats to want to see this Social Security shark dead before they get into the water to negotiate.

To contact the writer of this column: Gene Sperling in Washington at gsperling@cfr.org

Last Updated: June 1, 2005 08:14 EDT