- The Washington Times - Sunday, April 3, 2005

President Bush’s Social Security investment accounts plan has sparked a lot of debate among Republicans, and the Democrats’ news release machine hasn’t let any doubt or disagreement go unnoticed.

Less noticed, though, has been the debate in the Democratic Party and among some of its traditional allies over how best to respond to this issue. There are doubts, and criticisms, too, about how Democratic leaders have handled this issue politically, and palpable fears that if their party does not fully acknowledge Social Security’s future insolvency and come up with a sellable solution, it will pay a painful political price for their obstructionism in the next election.

At the top of the list of Democratic complaints is Senate Minority Leader Harry Reid’s head-in-the-sand insistence Social Security is just fine for decades to come. Not only does every poll show most Americans do not believe this, Social Security’s latest trustees’ report says the system will begin running out of money sooner than forecast.

Earlier this year, Mr. Reid, backed by the party’s leadership, declared “Social Security is just fine for the next 50 years.” When the nonpartisan trustee monitors of the system’s finances, said last month Social Security will begin paying out more in benefits than it receives in taxes in 13 years, and will go broke in 2041, Mr. Reid dismissed it as nonsense. “Today’s report confirms that the so-called Social Security crisis exists in only one place: the minds of Republicans,” he said. “In reality, the program is on solid ground for decades to come.”

Mr. Reid’s refusal to accept the warnings of Social Security’s actuaries was too much even for The Washington Post, which slammed him. “One can debate the merits of creating personal accounts in Social Security, but not the case for fixing the program’s solvency problems,” The Post said in an editorial.

“The senator’s desire to score political points is understandable. His willingness to do so by implying that Social Security is healthy is not,” The Post said.

A further problem for many Democrats is their party’s failure to come up with a fix-it plan of their own. That position, they say, is politically untenable.

“Just saying ‘no’ to Bush may appeal to paleoliberals who are in denial about the need to modernize the 70-year-old retirement program. But simple rejectionism is a loser for Democrats, substantively and politically,” said Will Marshall of the Democratic Leadership Council.

Democratic advisers like Harold Ickes, deputy chief of staff in the Clinton White House, acknowledge the Democrats’ attack strategy has worked fine until now — raising doubts about Mr. Bush’s plan and staying on the offensive. But at some point, he says, they must come to the table with a plan of their own.

“I think the country thinks there’s a problem [and] something has to be done to fix it,” he told me last week. “At some point the Democrats are going to have to come up with a proposal, but it’s a question of timing. At some point, they will have to come with something.”

Similarly, Democratic allies at the Brookings Institution, where the Democrats’ so-called “shadow government” sits when out of power, say something must be done to fix the financing system, and the earlier, the better.

Brookings economist Gary Burtless, for one, thinks a combination of benefit reductions and tax increases “are going to be necessary to make the program solvent. Doing this sooner rather than later is good because it will provide workers in the future a more accurate estimate of what their benefits will be,” he told me.

Benefit cuts are out of the question for the Democrats, though not tax increases, which are likely to be part of any plan they could put forth. Meanwhile, there is behind-the-scenes talk in Democratic circles that tentative work has already begun on a fix-it plan that could be offered later this year.

But Democratic graybeards like Mr. Ickes caution their party should be very careful of Mr. Bush’s strategy and the very likely possibility he could cut a last-minute deal and declare victory.

“They are very cagey over at the White House. Bush has left himself a lot of latitude,” Mr. Ickes told me. Could Mr. Bush get a bill out of Congress? “A deal is always a possibility,” he replies. In the end, policymaking questions aside, Mr. Ickes sees this as a calculated political battle for a larger share of younger voters who like President Bush’s plan.

“I think it is completely a political fight. Bush and Karl Rove are trying to supplant the Democratic Party and the Democrats in the minds of workers under 45 years old and have the Republican Party seen as having reconfigured old-age retirement security,” he said.

In sheer political terms, that is exactly what this fight is all about, and Harry Reid knows it.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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