Social Security Reform Lite?

With the Administration's plan slipping in the polls, anxious GOPers are offering some olive branches to Democrats

By Lee Walczak

On Mar. 2, President Bush announced that his team would kick off a six-week grassroots blitz to make the case for individual investment accounts financed by diverting a portion of workers' Social Security payroll taxes. Trouble is, Bush has already been selling for months, and support for the concept has actually waned as more Americans focus on the risk side of the risk-reward equation.

Indeed, a new Pew Research Center survey released on the same day as the President's announcement finds that backing for new accounts has dipped to 46%, from 58% in December, an ominous sign for the traveling Salesman-in-Chief.

After a congressional recess in which many GOP lawmakers got an earful from seniors at local town meetings, Senate Majority Leader Bill Frist (R-Tenn.) now says reform legislation may not be possible this year. If that prediction pans out, it would kick the issue into 2006 and volatile election-year politics, a scenario opposition Democrats would welcome.


  Dems may have forgotten how to elect a Presidential candidate, but the party still has one trick left in its threadbare bag of tricks: the ability to scare seniors silly with ads that warn of the perils of privatization.

As apprehension spreads among voters and the GOP rank and file, the White House has reacted with a string of come-ons aimed at "no reform" Democrats. The latest: On Mar. 2, Treasury Secretary John Snow noted that, while he vastly prefers personal accounts carved out of existing payroll taxes, he wouldn't rule out add-on accounts that rely on alternative funding sources. That's a proposal long backed by Democrats and seniors.

Traditionally, Democrats and the seniors lobby have been more receptive to add-on accounts, because -- as in the case of the recent Medicare prescription drug benefit -- those accounts represent a new government goody for the elderly.


  The ultimate aim of this trail of Bush bread crumbs is to get Dems, currently hunkered down in no-deal posture, to begin a dialogue with reform-minded Republicans. It will be an interesting test of Democratic unity to see if this tactic peels off a few defectors and begins the negotiating process.

The physics of Social Security reform, however, is really a push-pull kind of thing. Every time Bush makes a move to lure moderate Dems, he alienates conservatives, especially in the House of Representatives. That may be a key reason that House Majority Leader Tom DeLay of Texas has joined Frist in musing that deferring a reform measure for future action wouldn't be calamitous.

Give Bush credit for a couple of things, though. First, he's sticking to his guns in the face of political adversity. And he seems partially correct in declaring that Social Security has ceased to be the third-rail of American politics.


  But while polls show that the President isn't being personally blamed for the fizzling Social Security push, other Republicans who lack Presidential Teflon clearly are worried about their own necks. These are the folks who must face the voters again -- when Bush will likely be selecting the curtains for his combined Presidential library and rodeo stadium back in Texas.

Bottom line: This is definitely the darkness-before-dawn period for the Social Security reform push. In the past, a focused, relentless, and persuasive George W. has taken his case to the public and turned flagging poll numbers around (see Iraq, case for war). But with public support for a Social Security revamp fading and GOP pols feeling skittish, could this time be different?

Walczak is Washington bureau chief for BusinessWeek

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