As they barnstorm the country trying to win supporters, Republican presidential hopefuls are regularly talking up the need to "save" Social Security by cutting it.
But, in what may be an example of political prescience — or, at the very least, reason for political relief — given Monday's stock market swoon, they've been mysteriously silent about one issue that many conservatives support: privatization. Instead of calling for private accounts that give seniors the ability to invest their Social Security benefits, with all the potential for reward and risk that implies, many of this year's Republican candidates are calling for maintaining the structure of the popular federally-managed retirement program. Their plans for saving money: Making benefits less generous.
New Jersey Governor Chris Christie came out early and strongly for cutting Social Security, proposing in April to raise the eligibility age to 69, reduce benefits for seniors who earn more than $80,000 and end them entirely for those earning upwards of $200,000. No privatization.
This month in Iowa, Jeb Bush said he opposes the plan to privatize Social Security backed by his brother, former President George W. Bush. "It would've made sense back then. Now we're we beyond that," he said, calling for raising the retirement age and income-based means testing. Florida Senator Marco Rubio regularly discusses the need for Social Security changes like lifting the eligibility age for people under 55 and slowing the growth of benefits, but he doesn't mention privatization. Texas Senator Ted Cruz backed private accounts as "transformative" during an April interview with CNBC, but he seldom, if ever, discusses it on the campaign trail.
In a way, it's not an unusual dynamic. In his 2000 campaign, George W. Bush heralded Social Security as "the single most successful program in government history." He endorsed private accounts for Social Security during his 2004 reelection bid, before launching a major privatization push the following year, which which have allowed personal accounts for younger beneficiaries to invest their benefits. Democrats killed the initiative, and it was never attempted again.
"The reason politicians don't talk about it is that every time you talk about it and senior citizens show up at any kind of a rally, they basically say keep your f--king hands off my Social Security. So it's not an applause line," said John Feehery, a lobbyist who formerly served as Republican House Speaker Dennis Hastert's top spokesman during the Bush presidency.
Another "reason they don't talk about it is because of the volatility in the stock market," said Feehery, one day after the Dow Jones Industrial Average dropped 1,000 points before beginning to rebound. The defeat of Bush's privatization plan in 2005 also stung Republicans. Feehery said Bush "completely mishandled" its messaging on the issue, failing to sell the positive aspects of private accounts.
But that doesn't mean the idea is dead. It continues to have strong support among Wall Street donors, influential fiscal conservatives and congressional Republican leaders. The lesson from the 2005 debacle was about branding.
Feehery said the idea of voluntary or supplemental private accounts for Social Security could potentially make a comeback under a Republican presidency. But "you're not going to privatize the whole system," he said. "I think [candidates] should be talking about private accounts, because the return on the investment on Social Security is so abysmal. It's the only way to save Social Security. So I think it's a missed opportunity."
In 2008, McCain said there "may be a role for private investment accounts for younger workers" but de-emphasized his previous support for private accounts. In 2012, Romney steered clear of privatization, although his running mate Paul Ryan, currently the chairman of the powerful House Ways & Means Committee, stood by his support for private accounts.
Social Security, which enjoyed its 80th anniversary of enactment this month, has the funds to pay out full benefits until 2034, according to its latest trustees report. The program's disability insurance fund, technically operating on a separate stream of money, is set to dip in the red in 2016. House Republicans have signaled an interest in making cuts to keep the disability fund solvent rather than make another "reallocation" from the main fund.
"Social Security as a whole as well as Medicare cannot sustain projected long-run program costs under currently scheduled financing," the report said.
Democrats, meanwhile, strongly oppose any kind of privatization of Social Security and generally oppose cutting the program at all. They've instead proposed addressing the long-term problems by raising the cap on income that is subject to Social Security payroll tax.