Social Security

Social Security inspired one of the most memorable jokes of the 2000 presidential campaign – the Saturday Night Live skit mocking Al Gore’s pledge to put Social Security in a “lockbox” – but unfortunately George W. Bush proved to be extremely serious about attempting to privatize the retirement program. Bush pushed his version of “reform” in both terms of his presidency, but Congress never sent a bill to his desk. Nevertheless, the Bush Presidential Library and Museum credits him for raising “awareness of the problems facing Social Security and how to solve them.” The reality, however, is that Bush’s stubborn and ill-advised commitment to Social Security privatization represented one of his worst failures.

After taking office, Bush waited only a few months to appoint a commission tasked with crafting a proposal to establish private retirement accounts as a substitute for traditional Social Security benefits. Despite being stacked with members who shared Bush’s right wing vision, the commission exposed the high costs associated with privatization, while offering three plans that combined private accounts with harmful benefit cuts. President Bush did not pressure Congress to take up the commission’s report when it was released in late 2001, though the terrorist attacks of September 11 provided a plausible reason for inaction.

Bush renewed his focus on Social Security after winning re-election, making privatization the “top domestic priority” of his second term. In January 2005, the White House and its allies launched a massive campaign to sell Bush’s plan, including a cross-country tour in which the president made his case to the voters. It didn’t work: Democrats and seniors united in opposition; Republicans feared the political ramifications and split into factions; and the public soured on the idea of privatization as they learned more about it. The president’s cause was all but lost when Hurricane Katrina hit in August 2005, though Bush signaled his desire to revive the plan before Republicans lost control of Congress in the following year’s midterm elections.

SHARE

Bush’s Quest: “Personal Retirement Accounts” future

Bush Started Push To Privatize Social Security In 2000 Presidential Campaign

Bush Began Campaigning On Partial Privatization Of Social Security After Winning The Republican Primary. According to The Washington Times, “Texas Gov. George W. Bush, in a sign of growing confidence in his presidential candidacy, soon will begin campaigning for an idea that has long been feared as the deadly ‘third rail’ of American politics: partially privatizing Social Security. In series of upcoming speeches and policy initiatives dealing with ‘family security,’ the presumptive Republican presidential nominee plans to promote his proposal to give workers the option of putting a portion of their Social Security payroll taxes into their own private investment retirement accounts, his campaign aides said. […] Mr. Bush’s proposal, which he avoided raising during the primaries, would dramatically change the New Deal-era program by letting workers invest a part of their automatically deducted payroll taxes into stock or bond funds that would produce much higher investment returns on their contributions over their working lives than the 1 percent to 2 percent that Social Security now offers future beneficiaries.” [The Washington Times, 4/25/00]

View More

Bush Called For “Far-Reaching” Social Security Overhaul That Would Establish Individual Retirement Accounts. According to the New York Times, “Casting the overhaul of the Social Security system as a ‘test of presidential candidates,’ Gov. George W. Bush today proposed a fundamental change in the retirement system that would allow workers to choose how to invest some of their payroll taxes. With his formal call for the introduction of individual retirement accounts, Mr. Bush, the presumptive Republican presidential nominee, began a debate that could dominate the campaign. […] Shifting some of the payroll tax into individual retirement accounts would amount to the most far-reaching change in Social Security since its inception in the Depression. As Social Security has worked for decades, current retirees are paid from the payroll taxes of current workers; under the Bush plan, workers would be able to use a portion of their payroll taxes and invest them for their own retirement.” [New York Times, 5/16/00]

Bush Avoided Specifics, Leaving Questions About Who Would Be Affected By His Proposal And Its “Significant” Costs. According to the New York Times, “But the lack of specifics on matters like what percentage of payroll tax would go to accounts and what age group would see the change opened Mr. Bush to charges that he was masking some of the hard choices ahead and trying to sidestep questions about how he could afford the transition as well as his sweeping call for a $1.3 trillion tax cut in the next decade. The costs of making the transition to such a system would be significant — as much as $1 trillion — because the government could have to pay out full benefits to current retirees at the same time that some amount of payroll taxes were being diverted into individual accounts.” [New York Times, 5/16/00]

First Term: Bush Created A Social Security Commission To Draft A Plan To Establish Private Accounts

In Early 2001, Bush Appointed A “Bipartisan” Commission To Draft A Proposal. According to the Baltimore Sun, “President Bush will appoint a Social Security reform commission today that is touted as bipartisan but is also stacked with scholars and former lawmakers who largely share his view that the retirement program should be partially privatized. The 16-member commission – eight Republicans and eight Democrats – is being asked to draft a plan to overhaul Social Security and present it to Bush in the fall, a senior administration official said. White House spokesman Ari Fleischer said the panel would be comprised of ‘people who are committed to the president’s ideas.’ ‘Of course, he is putting together a commission that believes in what he believes in,’ Fleischer said.” [Baltimore Sun, 5/2/01]

President Bush’s Commission Announcement: “Social Security Reform Must Offer Personal Savings Accounts To Younger Workers Who Want Them.” According to a transcript, at his announcement of the President’s Commission to Strengthen Social Security, President Bush said, “Two months ago, in my address to Congress, I described the principles that must guide any reform of Social Security. First, Social Security reform must preserve the benefits of all current retirees and those nearing retirement. Second, Social Security reform must return the Social Security system to sound financial footing. Third, Social Security reform must offer personal savings accounts to younger workers who want them. Today, young workers who pay into Social Security might as well be saving their money in their mattresses. That’s how low the return is on their contributions. And the return will only decline further — maybe even below zero — if we do not proceed with reform. Personal savings accounts will transform Social Security from a government IOU into personal property and real assets; property that workers will own in their own names and that they can pass along to their children. Ownership, independence, access to wealth should not be the privilege of a few. They’re the hope of every American, and we must make them the foundation of Social Security. Today, I am naming a Presidential Commission to turn these principles into concrete reforms.” [Bush Remarks, 5/2/01]

View More

Critics Viewed The Commission “A Stacked Deck.” According to the Baltimore Sun, “But Democratic leaders complained that expected members seemed to be selected to achieve a pre-ordained result – backing Bush’s campaign proposal to let younger Americans divert some of their payroll tax money into private investment accounts. ‘This is a stacked deck,’ said Senate Minority Leader Tom Daschle. ‘This is not an objective view of our options under Social Security. We don’t need another lobbyist group.’” [Baltimore Sun, 5/2/01]

Potential Commission Member Said He Was Asked “Whether He Would Agree In Advance To Recommend That Social Security Taxes Be Redirected Into Private Accounts.” According to the Baltimore Sun, “Bush aides considered naming current members of Congress to the commission but had some difficulty persuading Democrats to take part. One Democrat, who spoke on the condition he not be identified, said he had been asked whether he would be willing to serve against the wishes of his party leaders and whether he would agree in advance to recommend that Social Security taxes be redirected into private accounts. He declined.” [Baltimore Sun, 5/2/01]

Social Security Commission’s Charter Stated That “Payroll Taxes Must Not Be Increased” And Reform “Must Include… Personal Retirement Accounts.” According to the Charter of the President’s Commission to Strengthen Social Security, “Executive Order 13210 establishes the President’s Commission to Strengthen Social Security. The Commission will provide bipartisan recommendations to the President for modernizing and restoring fiscal soundness to the Social Security System according to the following principles: modernization must not change Social Security benefits for retirees or near retirees; the entire Social Security surplus must be dedicated to Social Security only; Social Security payroll taxes must not be increased; the Government must not invest Social Security funds in the stock market; modernization must preserve Social Security’s disability and survivors components; and modernization must include individually controlled, voluntary personal retirement accounts, which will augment the Social Security safety net.” [Charter of The 2001 President’s Commission to Strengthen Social Security, 5/21/01]

Social Security Commission’s Report Offered Three Proposals That Included Private Accounts And Benefit Cuts. According to Cox News Service, “A presidential commission finished its work on Social Security reform Tuesday and immediately touched off a major political battle. The Commission to Strengthen Social Security offered three proposals for personal investment accounts to bolster the nation’s retirement, disability and survivor’s benefit program. All three plans envision diverting part of the 12.4 percent payroll tax into personal investment accounts and reducing benefits accordingly. Two of the plans would further reduce benefits, either by changing the formula used to compute a retiree’s initial benefits or by adjusting for a retiree’s increased life expectancy.” [Cox News Service, 12/11/01]

Commission Acknowledged High Cost Of Reform, But “Did Not Suggest How To Pay For It.” According to the Washington Post, “At its final meeting before it goes out of business, the President’s Commission to Strengthen Social Security acknowledged for the first time that such a profound change in the nation’s retirement system would eventually cost at least $ 2 trillion, though it did not suggest how to pay for it. The panel also concluded that Social Security cannot be rescued from the financial precipice it will reach by the middle of the next decade without cutting benefits for retirees and disabled Americans, using money from elsewhere in the federal budget, or both.” [Washington Post, 12/12/01]

Social Security Commission Recommended Delay Before Pursuing Reforms. According to the Dallas Morning News, “Social Security reform is dead – at least until 2003. A presidential commission unanimously recommended Tuesday that a rescue plan for the nation’s retirement system – a top priority of President Bush’s just months ago – be delayed for at least a year. The 16-member bipartisan commission was supposed to draw up a blueprint for converting a portion of Social Security into private investment accounts. And the panel was charged with including a plan to plug an estimated $ 5 trillion shortfall facing Social Security by 2075. What changed? A national recession, the stock market correction, and the war on terrorism to name a few. With those developments in mind, the president asked the two co-chairmen of the President’s Commission to Strengthen Social Security for the delay.” [Dallas Morning News, 12/12/01]

Following Report, “Bush Let The Moment Pass Without Comment,” Leaving The Future Of Social Security Reform In Doubt. According to Congressional Quarterly Weekly, “When President Bush appointed a bipartisan commission in May to recommend ways to overhaul Social Security, he declared in a Rose Garden ceremony that it was time to modernize the program by adding personal savings accounts into the mix. ‘We can postpone action no longer,’ he said. ‘We must save Social Security, and we now have the opportunity to do so.’ When the commission released its long-awaited recommendations Dec. 11, Bush let the moment pass without comment. For lawmakers and groups who supported Bush’s call for action last spring, the commission’s report was a missed opportunity. They believe Bush had a narrow window of opportunity at the start of his presidency, with the federal government enjoying huge budget surpluses, to build support for an overhaul and get Congress to move on it. Now, they say, the economy has soured, the surpluses are gone and the ‘golden moment’ has passed. It is unlikely to come back until 2003 — if then.” [Congressional Quarterly Weekly, 12/14/01]

Second Term: Social Security Privatization Was Bush’s “Top Domestic Priority”

Bush Made Social Security “His Top Domestic Priority” After His Re-Election. According to a report by Brookings Institution Senior Fellow William A. Galston, “Following his successful 2004 reelection campaign, President George W. Bush designated fundamental Social Security reform as his top domestic priority. This was anything but an impulsive decision. As early as his 1978 congressional race, he had suggested that the Social Security System could not be sustained unless individuals were allowed to invest the payroll tax themselves. Overriding the doubts of some political advisors, he raised the issue while announcing his first presidential race, declaring that ‘We should trust Americans by giving them the option of investing part of their Social Security contributions in private accounts.’” [Brookings.edu, September 2007]

In January 2005, Bush Administration “Launched A Huge Initiative… To Mobilize Public Opinion And Build Public Support For Social Security Reform.” According to a report by Brookings Institution Senior Fellow William A. Galson, “Within days after the election, President Bush made it clear that he did not intend to play it safe on Social Security reform and other controversial issues. In a post-election press conference, he asserted, ‘I earned capital in this campaign, political capital, and now I intend to spend it.’ He was as good as his word. By mid-January of 2005, the White House had launched a huge initiative, directed by Karl Rove and Ken Mehlman, to mobilize public opinion and build public support for Social Security reform and other key presidential proposals.” [Brookings.edu, September 2007]

View More

Bush Allies Raised “Millions Of Dollars For An Election-Style Campaign To Promote Private Social Security Accounts.” According to the Washington Post, “President Bush’s political allies are raising millions of dollars for an election-style campaign to promote private Social Security accounts, as Democrats and Republicans prepare for what they predict will be the most expensive and extensive public policy debate since the 1993 fight over the Clinton administration’s failed health care plan. With Bush planning to unveil the details of his Social Security plan this month, several GOP groups close to the White House are asking the same donors who helped reelect Bush to fund an extensive campaign to convince Americans — and skeptical lawmakers — that Social Security is in crisis and that private accounts are the only cure.” [Washington Post, 1/1/05]

February 2005: Bush Placed Social Security “At The Heart Of His 2005 State Of The Union Address.” According to a report by Brookings Institution Senior Fellow William A. Galston, “The President followed up two weeks later, placing a lengthy discussion of Social Security at the heart of his 2005 State of the Union address. After citing the fiscal and demographic pressures moving the system toward eventual bankruptcy, he listed some basic principles and then reached the nub of the matter: ‘As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers. And the best way to reach that goal is through voluntary personal retirement accounts.’ This approach, the President argued, would offer younger workers a ‘better deal.’” [Brookings.edu, September 2007]

April 2005: Bush Outlined New Social Security Plan In Prime-Time News Conference. According to the Baltimore Sun, “Opening a new phase in his so-far fruitless effort to revamp Social Security, President Bush outlined last night a plan that would scale back future benefits for middle- and high-income retirees, as he challenged a reluctant Congress to start work on shoring up the program. Bush, facing sagging approval ratings and gridlock in Congress on much of his ambitious domestic agenda, used the first prime-time televised news conference of his second term to declare that he would not back down in the face of opposition to his Social Security plan, a broad energy measure or his stalled judicial nominations.” [Baltimore Sun, 4/29/05]

News Conference Came After Bush Tour “Failed To Convince Americans To Support The Effort.” According to the Baltimore Sun, “The news conference came as the Bush administration closes a 60-day tour to promote an overhaul of the retirement program, which polls show has failed to convince Americans to support the effort. Bush has made Social Security the high-stakes focal point of his domestic agenda, taking on a political fight whose outcome could have a major impact on his legacy. Democrats have united strongly against his personal accounts proposal, calling it a privatization plan that would destroy the basic promise of Social Security — a uniform, guaranteed benefit for all retirees.” [Baltimore Sun, 4/29/05]

Bush’s Plan Mirrored Proposal “That Would Effectively Slash Benefits Below What Is Now Promised.” According to the Baltimore Sun, “On Social Security, the plan Bush outlined mirrors one offered by economist Robert C. Pozen, a Democrat and former Wall Street executive who served on Bush’s 2002 Social Security commission and now chairs Boston-based MFS Investment Management. It would leave low-income workers’ benefits untouched but change the method for calculating wealthier retirees’ Social Security payments from one based on wage growth to one tied to price growth, a much slower rate that would effectively slash benefits below what is now promised. Middle-income workers would get benefits based on a combination of wage and price growth, sustaining a smaller benefit cut.” [Baltimore Sun, 4/29/05]

Bush Traveled The Nation Pitching Social Security Reform, But His Plan “Was On Life Support” By The Summer And Abandoned By The Fall. According to a report by Brookings Institution Senior Fellow William A. Galston, “Having invested so much political capital in this issue, President Bush embarked on the first of what proved to be a long series of tours crammed with events at which he pitched his plan to the people. It soon became apparent that it would be a tough sell. Within weeks, observers noticed that the more the President talked about Social Security, the more support for his plan declined. According to the Gallup organization, public disapproval of President Bush’s handling of Social Security rose by 16 points—from 48 to 64 percent–between his State of the Union address and June. By early summer the initiative was on life support, with congressional Democrats uniformly opposed and Republicans in disarray. After Hurricane Katrina inundated what remained of the President’s support, congressional leaders quietly pulled the plug. By October, even the President had to acknowledge that his effort had failed.” [Brookings.edu, September 2007]

In 2006, Bush Signaled Desire To Revive Social Security Plan Even Though It Previously Failed Due To “Broad Public And Congressional Opposition.” According to Bloomberg, “President George W. Bush said Republicans can hold their congressional majority by focusing on national security and the economy, and that he will return to overhauling Social Security as a top domestic priority for his last two years in office. […] The top items on the agenda, Bush said, are immigration and Social Security. The Republican-led Congress stymied Bush on both after the president won re-election in 2004 and made them his top priorities. Bush’s plan to let workers divert a portion of their Social Security payroll taxes to private savings accounts — along with other steps to address future shortfalls in the government retirement insurance program — never made it to a legislative proposal in the face of broad public and congressional opposition.” [Bloomberg, 10/22/06]

A Bad Plan: Private Accounts Would Exacerbate the Problem

While Social Security’s “Principal Problem Was A Long-Term Threat To Its Solvency,” Bush Focused On Private Accounts That “Would Exacerbate The System’s Fiscal Woes.” According to a report by Brookings Institution Senior Fellow William A. Galston, “If the Social Security system’s principal problem was a long-term threat to its solvency, as the President rightly argued in his 2005 State of the Union address, it was not clear how private accounts were even part of the solution. At best, they would function alongside of, and in addition to, needed fiscal reforms; at worst (and this turned out to be the case), they would exacerbate the system’s fiscal woes.” [Brookings.edu, September 2007]

View More

Bush In 2000: “If We Do Nothing To Reform The System,” Social Security “Will Be Insolvent.” According to Bush’s remarks on May 15, 2000, “We are nearing social security’s greatest test. Eight years from now, the massive baby-boomer generation will begin drawing benefits. Their lives will be long and healthy. And within two decades, there simply won’t be enough younger workers to pay the benefits earned by the old. If we do nothing to reform the system, the year 2037 will be the moment of financial collapse. The system will be insolvent, with deficits in the trillions of dollars, requiring either a massive cut in benefits or a massive increase in taxes. [Bush Remarks, 5/15/00]

Bush In 2005: “We Must Join Together To Strengthen And Save Social Security” Because It Was “Headed Toward Bankruptcy.” According to President Bush’s 2005 State of the Union address, “One of America’s most important institutions — a symbol of the trust between generations — is also in need of wise and effective reform. Social Security was a great moral success of the 20th century, and we must honor its great purposes in this new century. The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security.” [Bush State of the Union Address, 2/2/05]

CBPP: “By Themselves, Individual Accounts Do Nothing To Improve Social Security’s Financial Condition.” According to the Center on Budget and Policy Priorities, “By themselves, individual accounts do nothing to improve Social Security’s financial condition. In and of itself, allowing Social Security revenue to be diverted into individual accounts — as a system of carve-out individual accounts would do — reduces the funds available for Social Security and thereby exacerbates the financial imbalance within Social Security. For example, establishing individual accounts by diverting two percentage points of the current payroll tax for all workers would accelerate the date on which the Social Security trust funds are exhausted — and Social Security revenue is sufficient to pay only about 70 percent of promised benefits — from 2038 to 2024. To reduce the actuarial imbalance within Social Security rather than to increase it, carve-out individual accounts must be tied to benefit reductions within the traditional Social Security program, and those benefit reductions must more than make up for the reduced revenue flowing into Social Security.” [CBPP.org, 8/21/01]

CBO: Argument “That Private Accounts Would Offer Higher Rates Of Return” Is “Misleading.” According to the Congressional Budget Office, “Some people argue that private accounts would offer higher rates of return than the traditional Social Security system does, but that argument can be misleading. Social Security has a low rate of return largely because initial generations received benefits far greater than the payroll taxes they paid; that difference would have to be made up even if the Social Security system was entirely replaced by private accounts. Moreover, investing in the stock market — through either private accounts or government purchases of stocks for the Social Security trust funds — is no panacea. Corporate stocks deliver a higher expected return than government bonds because they carry higher risks.” [CBO.gov, 9/1/01]

EPI: All Of The Commission’s Proposals “Would Require Large Benefit Cuts.” According to the Economic Policy Institute, “The presidential commission charged with offering options to privatize Social Security has completed its work. Seven months in the making, the commission’s final report shows clearly that the privatization idea is bankrupt. The proposals outlined during its last meeting on November 29 revealed that privatizing Social Security would require large benefit cuts that are not offset by higher returns from individual accounts. All workers would see declining standards of living if the commission’s proposed benefit cuts were enacted. Depending on which of the three proposals is adopted, younger workers would see disproportionate benefit cuts, as would African Americans, women, and lower-wage workers. In addition, the three proposals would require potentially massive infusions of tax dollars to implement.” [EPI.org, 12/1/01]

CBPP: “Transfers From The General Revenue” Needed To Establish Private Accounts “Would Result In Substantial Deficits Outside Of Social Security.” According to the Century Foundation and the Center on Budget and Policy Priorities, “The commission’s plans involve contributions into individual accounts that could amount to more than $1 trillion over the next 10 years and almost $3 trillion over the next 20 years. Aside from the additional payments that individuals could make (under one of the plans) on top of existing Social Security taxes, such contributions must come from one of two sources: funds diverted from the Social Security Trust Fund or funds transferred from general revenue. Given the dramatic deterioration in the budget outlook, transfers from general revenue would result in substantial deficits outside of Social Security. The commission appears unwilling to identify how such deficits would be financed.” [CBPP.org, 12/3/01]

Without Transfer Of “Vast Sums From The Rest Of The Budget” The Commission’s Plans Would Have Hastened Insolvency Of The Social Security Trust Fund. According to the Center on Budget and Policy Priorities, “The Commission plans rely on the transfer in coming decades of vast sums from the rest of the budget to Social Security despite the fact that surpluses outside Social Security have disappeared. While insisting that its critics specify where the money would come from for courses they wish to pursue, the Commission fails to indicate how any of the general revenue transfers it includes in its plans would be financed. The Commission report essentially rests on a ‘magic asterisk’ of unprecedented proportions. In the absence of general revenue transfers, all three Commission plans would accelerate the year in which Social Security becomes insolvent, as a result of the diversion of payroll tax revenues from Social Security to individual accounts. Data in the Commission report show that without general revenue transfers, the year in which the Social Security Trust Fund would become insolvent would be accelerated from 2038 under current law to the 2020s under the Commission’s plans.” [CBPP.org, 12/26/01]

Bush In February 2005: “I Fully Recognize That The Personal Retirement Account Is Not The Only Thing Needed To Solve Social Security Permanently.” According to the Associated Press, “President Bush, on a road trip to promote private Social Security accounts, acknowledged Friday that his proposal would not by itself fix the future financial problems of the retirement program. […] ‘I fully recognize that the personal retirement account is not the only thing needed to solve Social Security permanently,’ Mr. Bush said. ‘But it’s a part of the solution.’ The president has not spelled out the size of benefit cuts that would go along with the private accounts.” [Associated Press, 2/4/05]

“Both The Public And Lawmakers Recoiled” When Bush Conceded That Overhaul Would Require Benefit Cuts In Addition To Private Accounts. According to the Wall Street Journal, “As a candidate, Mr. Bush had never spelled out his Social Security plans, except to suggest that carving out private accounts would solve the program’s looming financial woes. When he acknowledged this year that they wouldn’t, and that future benefits would need to be reduced, both the public and lawmakers recoiled.” [Wall Street Journal, 10/20/05]

To Address Fiscal Troubles, Bush Proposed “Progressive Indexation” That Would Have Cut Social Security Benefits For People Earning As Little As $25,000 Per Year. According to a report by Brookings Institution Senior Fellow William A. Galston, “It was not until late April that the President addressed the system’s fiscal gap, proposing a formula change, ‘progressive indexation,’ that would have cut benefits for the upper 70 percent of future retirees, with those at the top losing the most. Some conservatives rejected, on principle, the proposition that the level of sacrifice should rise with income. ‘That’s an idea that comes from the left typically—means testing,’ said Rep. Paul Ryan (R-Wis). […] And while surveys indicated strong support for limiting benefits going to the wealthy, few Americans believed that workers earning $25,000 a year fell into that category. But that is where the President’s formula change began to bite. Workers earning about $36,500—again, no one’s idea of the ‘wealthy’–would have seen a long term benefit reduction of about 20 percent.” [Brookings.edu, September 2007]

Under Bush’s 2005 Proposal, Many Americans Would Have Faced Deeper Benefit Cuts Than They Would If Social Security Became Insolvent. According to the Center on Budget and Policy Priorities, “For many workers, cuts would be deeper than if no action were taken and Social Security became insolvent. The Social Security Trustees project the Social Security Trust Fund will be depleted in 2041. (The Congressional Budget Office projects this will occur in 2052.) The President has repeatedly characterized 2041 as the year when the system becomes ‘bankrupt’ (an inaccurate characterization because the system would still pay 74 percent of scheduled benefits at that time). Yet for workers who now make about $55,000 or more, Social Security benefits would be cut more deeply under the benefit-reduction proposal the President now has endorsed than if nothing were done to restore Social Security solvency.” [CBPP.org, 4/29/05]

White House Officials Debated Making A Deal Without Private Accounts, But Karl Rove And Others Argued Against It. According to the Washington Post, “White House aides have been locked in a debate over whether it would be a victory if Bush settled for a Social Security deal without private accounts. Some White House domestic policy officials have suggested that the savings that would flow from reducing future Social Security costs would go a long way toward fixing the government’s long-term financial problems. But Rove, among others, has told Republicans that it would be unwise, both from a political and policy standpoint, to reduce benefits without offering people the potential of better returns through personal accounts, aides said. ‘It gets no easier without private accounts,’ a senior White House official said.” [Washington Post, 6/16/05]

Bush’s Failure: Losing the Debate

Bush Library Claims That His “Proposals Created A Public Debate That Raised Awareness Of The Problems Facing Social Security And How To Solve Them.” The following photograph is from the George W. Bush Presidential Library and Museum:

result

[George W. Bush Presidential Library and Museum Display, photo taken May 3-4, 2013]

Botched Politics: Bush Failed To Win Over Democrats, Republicans, Or The Public

Bush’s Attempt To Partially Privatize Social Security Died Because He “Overestimated His Post-Election Capital And Underestimated His Opposition.” According to the Wall Street Journal, “Through two campaigns, George W. Bush vowed to fix and partially privatize Social Security, the nation’s most popular government program. This year, claiming a re-election mandate and enjoying a Congress controlled by his party, the president finally made his move. Yet now even the president has acknowledged Social Security is dead for this year, his biggest domestic defeat to date. How could it have gone so wrong? According to people on both sides of the battle over Social Security, Mr. Bush overestimated his postelection capital and underestimated his opposition.” [Wall Street Journal, 10/20/05]

Re-Election Did Not Give Bush “A Popular Mandate To Proceed Boldly On Social Security, About Which He Had Talked In Only General Terms.” According to a report by Brookings Institution Senior Fellow William A. Galson, “The simplest explanation is that President Bush overestimated the amount of political capital he had banked. After all, he had prevailed by the smallest popular vote margin of any president reelected in the 20th century. And there was evidence that the campaign’s bitter, divisive tone had taken its toll. As President Bush’s second term began, he enjoyed the lowest approval rating—just 50 percent–of any just-reelected president since modern polling began. That was 9 points lower than Clinton and Nixon, 12 points lower than Reagan, and 21 points lower than Johnson—hardly the foundation for crushing a united opposition. Nor finally, had the 2004 campaign given the president a popular mandate to proceed boldly on Social Security, about which he had talked in only general terms. A December 2004 survey found that support for private accounts fell by nearly half—from 42 to 23 percent—if the introduction of these accounts meant a reduction in the guaranteed benefit.” [Brookings.edu, September 2007]

View More

Bush “Launched His Proposal From The White House Without Adequate Congressional Consultation.” According to a report by Brookings Institution Senior Fellow William A. Galston, “The way in which President Bush proceeded early on exacerbated the difficulty. Repeating the mistake that helped doom the Clinton health insurance plan, he launched his proposal from the White House without adequate congressional consultation. In so doing, he missed what might have been an opportunity to bring a handful of ‘New Democrats’ into the fold, and he failed to allay the misgivings of his own party’s leadership. The initiative thus violated the first law of politics: unify your friends while dividing your foes. The President’s proposal did just the opposite.” [Brookings.edu, September 2007]

GOP Senator: Bush “Didn’t Lay The Political Groundwork” For Congress To Pass Social Security Overhaul. According to the Wall Street Journal, “Nearly a year ago, the president surprised friends and foes by a pronouncement at his first postelection news conference. ‘We’ll start on Social Security now,’ he said. […] Yet many Congressional Republicans had hoped he would push tax overhaul instead. Even Sen. Lindsey Graham of South Carolina, a key Republican advocate of private accounts, despaired. Mr. Bush ‘jumped out with a very big idea that he ran on, but he didn’t lay the political groundwork in the Senate or the House,’ Mr. Graham recalls. ‘He ran on it. We didn’t. He’s not up for election again. We are.’” [Wall Street Journal, 10/20/05]

Bush Tried To Sell Democrats On “Bipartisan” Plan To Create Private Accounts Based On Findings Of 2001 Commission. According to the Wall Street Journal, “In early December, the president invited both parties’ congressional leaders — 16 lawmakers, with staff — to the White House. The real talks presumably would come later, with fewer people, in private. But this meeting didn’t go well. There would be no others. Mr. Bush said he hoped to work with them on a bipartisan solution. But the senior Democrat on the House Ways and Means Committee, New York Rep. Charles Rangel, said Democrats wouldn’t discuss a solution to Social Security’s looming financial woes as long as private accounts were on the table. Mr. Bush objected and said his 2001 commission had recommended such accounts, according to several participants. ‘It wasn’t a real commission,’ replied Montana Sen. Max Baucus. Mr. Bush had named only pro-accounts people to his panel.” [Wall Street Journal, 10/20/05]

Bush’s Attempt To Create Public Pressure On Centrist Democrats Instead Of Engaging Them Personally Was “Viewed Widely As A Big Blunder.” According to the Wall Street Journal, “The day after he officially presented his Social Security proposal in the State of the Union address Feb. 2, the president set off on a two-day trip to begin rallying public support. But his itinerary — North Dakota, Montana, Nebraska, Arkansas and Florida — had an underlying message aimed at another audience: Senate Democrats from ‘red’ states that had backed Mr. Bush for president. Today that kickoff is viewed widely as a big blunder. Instead of privately wooing centrist Democrats whose support he badly needed, Mr. Bush appealed straight to their red-state constituents. That only stoked the enmity left by his 2002 and 2004 campaigning against moderate Democrats who had backed much of his first-term agenda.” [Wall Street Journal, 10/20/05]

Sen. Ben Nelson: “If I Was Being Negotiated With, I Didn’t Know It.” According to the Wall Street Journal, “When Mr. Bush got to Omaha, Neb., waiting was Sen. Ben Nelson, perhaps his most reliable Democratic ally in the first term; the senator had been told of the event by a Nebraska Republican. Before 11,000 people, Mr. Bush called Mr. Nelson a Democrat ‘who is willing to put partisanship aside to focus on what’s right for America.’ In the limousine afterward, Mr. Nelson said he, Mr. Bush and several others mostly gabbed about University of Nebraska football, and the president agreed to quit calling him ‘Nellie’ and to call him ‘Benator’ instead. The president hasn’t talked to Mr. Nelson since. Mr. Hubbard visited several times, Mr. Nelson says, but ‘if I was being negotiated with, I didn’t know it.’” [Wall Street Journal, 10/20/05]

“Republicans Were Hopelessly Divided.” According to the Wall Street Journal, “A bigger problem for the president was his own party. Republicans were hopelessly divided. Mr. Bush led the so-called pain caucus, which favored both private accounts and, to keep Social Security solvent, future benefit reductions. ‘Free lunch’ conservatives wanted larger private accounts, and deeper borrowing to cover the multitrillion-dollar costs for creating them, and they opposed any benefit reductions or payroll-tax increases. Some moderate Republicans opposed private accounts altogether. Then there was the do-nothing camp, which included most House leaders, worried about losing their majority.” [Wall Street Journal, 10/20/05]

Bush Administration’s Outreach To AARP Backfired. According to the Wall Street Journal, “Support from the 36-million-member AARP had been crucial to Mr. Bush’s 2003 achievement of a Medicare law adding prescription-drug benefits. The White House thought it had the group’s agreement to a similar alliance on Social Security. In late 2003, AARP had agreed to join administration appointees from the Social Security Administration in public forums about the program’s problems as the retiree population grows, according to Bill Novelli, AARP’s chief executive. But when the White House tried to add a business group favoring private accounts, AARP pulled out. Days after Mr. Bush’s inauguration, the dispute exploded. At the Ritz-Carlton Hotel near the White House, Mr. Novelli and policy director John Rother unveiled plans to denounce the accounts in AARP’s costliest-ever campaign of media ads and grass-roots activities.” [Wall Street Journal, 10/20/05]

AARP CEO : “We Are Dead Set Against Carving Private Accounts Out Of Social Security Taxes,” Which Would Result In “Dismantling” The Program.” According to USA Today, “The nation’s largest seniors’ lobby will oppose any proposal that takes tax money out of Social Security to create private investment accounts for today’s workers, the head of AARP said Monday. That puts the group on a collision course with President Bush and Republicans in Congress. AARP has already unleashed an advertising campaign against Bush’s expected proposal. The comments by William Novelli appear to slam the door on overtures from GOP congressional leaders, who hoped the seniors’ group might support a compromise plan that includes private accounts. […] ‘We are dead set against carving private accounts out of Social Security taxes,’ he said. ‘We can fix Social Security without dismantling it, which is what private accounts carved out of Social Security do.’” [USA Today, 1/24/05]

Bush’s Plan Became More Unpopular As The Public Learned More About It. According to the Pew Research Center for the People & the Press, “President George W. Bush is losing ground with the public in his efforts to build support for private retirement accounts in Social Security. Despite Bush’s intensive campaign to promote the idea, the percentage of Americans who say they favor private accounts has tumbled to 46% in Pew’s latest nationwide survey, down from 54% in December and 58% in September. Support has declined as the public has become increasingly aware of the president’s plan. More than four-in-ten (43%) say they have heard a lot about the proposal, nearly double the number who said that in December (23%).” [People-Press.org, 3/2/05]

March 2005: Less Than 30 Percent Of Americans Supported Bush’s Handling Of Social Security. According to the Pew Research Center for the People & the Press, “The new poll indicates that the Social Security debate is packing a powerful political punch. It finds that just 29% of Americans approve of the way that Bush is handling the issue. This is the president’s lowest approval rating for any policy area, and is considerably lower than his overall job approval rating of 46%. Moreover, by a 65%-25% margin, most say the president has not explained his Social Security proposal clearly enough.” [People-Press.org, 3/2/05]

“Influential Republican” In Congress Accused Bush Of Having “Tin Ear” On Social Security: “We Could Not Have A Worse Message At A Worse Time.” According to the Washington Post, “ In recent meetings, House Republicans have discussed putting more pressure on the White House to move beyond Social Security and talk up different issues, such as health care and tax reform, according to Republican officials who asked not to be named to avoid angering Bush’s team. ‘There is a growing sense of frustration with the president and the White House, quite frankly,’ said an influential Republican member of Congress. ‘The term I hear most often is ‘tin ear,’’ especially when it comes to pushing Social Security so aggressively at a time when the public is worried more about jobs and gasoline prices. ‘We could not have a worse message at a worse time.’” [Washington Post, 5/31/05]

“A Clear Majority Of The Public” Did Not Believe Bush’s Social Security Rhetoric. According to the Washington Post, “President Bush yesterday said his plan to restructure Social Security would improve the program’s long-term stability without shrinking the retirement income of older Americans. But a new Washington Post-ABC News survey found a clear majority of the public does not believe that. The poll found that 56 percent said the president’s plan to couple new personal retirement accounts with a reduction in guaranteed benefits for most Americans would cut the overall retirement income of seniors. About a third — 32 percent — said Bush’s proposals would result in future retirees receiving more money. More troubling for a president who took a political risk by advocating reductions in future guaranteed benefits for all but the poorest Americans is that an even larger majority said the Bush plan would not fix the system’s financial problems. More than six in 10 — 63 percent — said the proposals would not improve the long-term financial stability of the Social Security system, while 32 percent said it would.” [Washington Post, 6/9/05]