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]

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]