Saturday, October 07, 2006

The Silver Lining?

Well, it's unclear yet how great an impact the Foley mess will have on GOP chances of retaining Congress. I'm hopeful that this might in fact, blow over quickly, and allow Republicans to return to discussing their strengths: economic growth and the War on Terror. If that happens, I think they have a fair chance of retaining their majorities. For that reason, I question whether it's wise for Dennis Hastert and other Congressional Republicans to try to turn the Foley affair into a weapon against Democrats; it's probably better to just move on.

And on a related point, Novak is, as always, worth a read. First off, he notes that the first indication is that the Foley scandal is not necessarily electoral death for the Republicans:

A footnote: Pollster John Zogby last week found no landslide effects of the Foley scandal. Democrats did lead the Reuters/Zogby polls in 11 out of 15 key House districts held by endangered Republicans. Democrats may have to win all 15 of those districts to be assured of ousting Republicans from House control. Democratic leads shown by Zogby were generally not of landslide proportions, and there was no immediate upsurge in Democratic strength as news coverage of the scandal intensified.

Also, he points out that several moderate former Democratic representatives are lobbying to keep Social Security reform 'on the table' for Bush's last two years in office:

Two moderate former Democratic congressmen -- Tim Penny of Minnesota and Charlie Stenholm of Texas -- are spearheading a campaign against organized labor's determination to fight any reform of Social Security.

The labor-sponsored Americans United to Protect Social Security has pressed Democratic candidates for Congress to join "a golden promise" against anything approaching President Bush's proposed Social Security reform.

A Sept. 26 "For Our Grandchildren" letter, signed by Penny and Stenholm, rejects the argument that Social Security does not need fixing. They contend its "financial outlook is deteriorating." While not advocating specific options, they call for bipartisan reform.

'Saving Social Security' is always going to be difficult in a government united under one party. Why would the loyal opposition choose to lend credibility to a reform plan that by its nature had to disappoint many people? It's far more advantageous politically to snipe. That's certainly one reason that Bush's efforts have failed so far: good policy and saving Social Security were not important enough to Democrats to overcome political calculation.

Well, if Democrats retake one or more Houses of Congress, it could be that both the GOP and the Democrats see the advantage in taking Social Security off the table before the 2008 campaign. After all, it's unclear which party would gain more from such a debate, as the growth in the investor class lends more support to the GOP side of the debate. Would Speaker Pelosi (and Majority Leader Reid?) join President Bush in a plan to save Social Security and take it out of the mix of 2008 issues? They might, particularly considering it could be the last chance to address the issue until the second term of whoever is elected President in 2008. For those who support Social Security, each year that passes without addressing the problems in the program, guarantees a harsher solution.

On the other hand, if Republicans retain the Congress with narrow majorities, Social Security reform is likely dead for a few years, anyway. The hand of those who want to eviscerate the program will definitely be strengthened.

Back to the top.

3 comments:

James Hamilton said...

Eviscerate? Amazing. Simply amazing. Seems you and other status quoists want to keep the system on the track toward crisis without even acknowledging this track leads to crisis for the program.

Get real. Let's go to the discussion table and deal realistically with the array of possible solutions. Simply playing to peoples' fears is irresponsible at best.

The Editor at IP said...

Thanks for the comment.

I'm not sure what you concluded about my views on Social Security. I certainly don't favor the status quo. If you re-read my post, you will note that I characterized the President's proposal as 'good policy,' and I've written elsewhere that the program is headed for a crisis, and Democratic demagoguery may lead to the program being gutted.

You may not like the connotations of words like 'eviscerate' and 'gut,' but there are certainly those who advocate that approach. And the Democratic 'defenders' of Social Security, who refuse to be part of a solution, are de facto allied with them.

The Editor

Anonymous said...

Here's some data in support of the recognition above that inaction will only lead to insolvency. All of it can be verified at www.ssa.gov, where you can find the Trustees' reports from this and previous years.

-- The currently projected shortfall in Social Security is now $13.4 Trillion. That's up from $10.5 Trillion in the 2003 Trustees' report. The majority of the increase in the measured size of the problem is attributable solely to the loss of three years.
-- The current "long-range" (75-year) shortfall that the Trustees see is actually bigger -- even relative to our larger economy -- than the one confronted by the Greenspan Commission in 1981-83. Occasionally you'll see reform opponents downplay the seriousness of the problem, relative to the "crisis" of the early 1980s. But the problem is actually even bigger now. In fact, the methodology was changed in 1988 to reduce the apparent size of the deficit. If we still used the same method the Greenspan Commission did, the shortfall would look almost twice as big as the one they saw. It's big.
-- An annual stochastic analysis shows almost no probability that the problem will go away. Right now they're saying costs will exceed revenues in 2017, with deficits growing thereafter without bound. But even if every economic and demographic variable breaks the same way, the problem remains. The 90th percentile of the distribution only postpones the deficits to 2020. The 97.5th to 2022. Those who say that the problem might go away if the Trustees are being too pessimistic are simply wrong.
-- As a note of trivia, the 1991 Trustees' report also predicted that crunch time would come in 2017, just as the latest report does. The date bounces around a bit from one report to the next, but net, it doesn't move. As real data comes in and replaces the projections, the problem stays right there, while we rush toward it. In 1991 we had 26 years of lead time; now we have only 11 years before we hit that wall, and it's much harder to spread the effects of corrective change fairly.

The bottom line is that the most effective way to "gut" Social Security, frankly, is to do nothing. Those who block corrective action are not serving the program nor those who depend upon it. And every year that passes without action is very expensive.