Will Social Security Do to Bush What
Health Care Reform Did to
By Darrell M. West,
A sitting president whose party controlled both the House and Senate attempted a major domestic reform. He traveled the country publicizing the importance of the issue. He tried to maintain unity within his own party’s ranks and made an effort to get members of the other party to work with him. In the end, though, he failed and his initiative went down in flames. As a result, his party lost a large number of seats in the following midterm election.
This story describes President Bill
Clinton and health care reform in 1993-94, but President George Bush is facing
a similar dilemma in his effort at Social Security reform in 2005. In this report, I look at Bush’s Social
Security plan from the vantage point of
The Problem of Large-Scale Reform
American government is not set up for large-scale reform. Our founders envisioned a political system that would not generate rapid change. The system of checks and balances guaranteed that change would be slow and a variety of interests would have ample opportunity to object to policy proposals. By the time a new idea has gone through subcommittees, committees, the House floor, and the Senate floor, outside groups have many chances to express their views.
It is for this reason that
large-scale policy changes generally fail in the
Proposals to enact major changes in our education system, tax system (such as a flat tax), or entitlement programs almost always lose. The reason is that our political system was set up to thwart that type of rapid and large-scale change. The combination of political fragmentation and institutional decentralization virtually guarantees that most change will be slow and small-scale.
When he became president in 1993,
President Cllinton established health care reform as
the centerpiece of his domestic policy agenda.
His goal was to provide health insurance for the uninsured and reform
the manner in which health care was financed, regulated, and delivered in the
Early in his presidency, the odds of
positive congressional action looked high.
President Clinton had a high degree of popularity and his party controlled
both the House and the Senate. Although
there were disagreements between Republicans and Democrats as well as within
the Democratic party, many observers thought some version of the
However, a variety of problems developed
that ended up torpedoing
Without a single vote being cast, the health care legislation stalled. The inability to attract GOP support and disunity among Democrats combined to produce a startling outcome to the health care debate. Not only was health care reform defeated, the failure to deliver promised changes led to big Democrat losses in the 1994 House and Senate elections.
Bush and Social Security
Following on the heels of his clear
victory over Democrats in the 2004 presidential election and GOP gains in the
House and Senate, President Bush chose Social Security reform as the top
priority for his second term. In an effort
to avoid the “second-term jinx”, Bush decided to go for an ambitious policy
change. Not only would he tackle the
issue often labeled as
At the beginning of Bush’s second term, the prospects looked promising. Republicans held unified control of the national government. They had significant majorities both in the House and Senate. Bush promised to use the political capital he had developed through his election victory to produce large-scale change in Social Security.
However, obstacles appeared shortly after the onset of the Social Security debate. Democrats made it clear they vehemently rejected any “partial privatization” of Social Security. Their fear was that stock market volatility would ruin Social Security pensions, especially for investors without much experience in the stock market.
By mid-Spring, Bush’s prospects for
success looked quite dim. Similar to
Within his own party, Bush was finding a lot of nervousness about Social Security reform. More and more House and Senate Republicans were expressing opposition to various aspects of the Bush plan. In particular, the private accounts proposed by Bush seemed to be uniformly unpopular. Poor stock market performance soured investors on private accounts, and press coverage turned more negative for Bush.
Democrats sensed the possibility of
a real political victory on the center piece of the president’s domestic
agenda. Rather than wanting to
compromise with him, many members of the opposition party decided to withhold
support for any Bush plan on Social Security.
There were few political rewards for helping rescue Bush (similar to the
calculation made by Newt Gingrich on
At this point, President Bush has three options. One, he could force a vote on his Social Security plan, lose the vote, and attempt to blame Democrats for being obstructionists. This is not a very good option, though, for the president because a loss on the centerpiece of his second term agenda would make him look weak and would encourage opponents to attack him on a variety of fronts.
Given lukewarm public support for his plan, an attempt to blame Democrats is not likely to be successful. Efforts to blame the opposition work only when the public is on the side of reform. Since this is not the case with Social Security, this option is not a very good choice for the president.
A second option would be to compromise with opponents, in hopes of enlisting some Democrats in the effort. Bush already has tried a variation on this strategy when he announced in early Spring that he was open to long-term benefit cuts for upper-income recipients. However, Bush has resisted the calls of some Democrats to drop the idea of private accounts and raise the income limit subject to Social Security tax beyond the current $90,000. Given his reluctance to give up private accounts, it is not likely that many Democrats will embrace the new Bush plan.
This leaves Bush with only one viable option on Social Security. He could jettison private accounts, open real dialogue with Democrats, and put all options (including either a tax increase or an increase in the income limit subject to the Social Security tax) back on the table.
The problem here, of course, is that
proposals likely to win Democratic support will cost him votes within his own
party. With the high degree of political
With three options that offer little chance of success, Bush’s Social Security initiative is headed toward the same end-point that befell President Clinton on health care and reformers on most other kinds of large-scale change. The American political system simply does not facilitate large-scale change unless the public strongly supports the change (such as occured in the case of welfare reform and cracking down on crime) or the political environment clearly favors the president.
The Electoral Fallout
The unresolved question at this
point is if Bush’s plan goes down in flames, as currently appears to be the
case, will Republicans suffer big losses in the 2006 House and Senate midterm
elections? If history is any guide, the
GOP is vulnerable in 2006. Democrats
suffered high losses in 1994 following the demise of health care reform because
Democrats were not able to deliver on what they had promised. This led some parts of the core Democratic
constituency to stay home, which paved the way for Republican victories in
1994. And at the same time,
While there are many uncertain
aspects of the 2006 election, the weakening of the economy and the uncertainty
of the new
Unless Republicans can end the cycle
of violence that continues to plague
However, Democrats should not
presume to be successful merely by opposing Bush’s initiatives. Gingrich was successful in 1994 in part
because he had a long list of proposals (the Contract with