- The Washington Times - Thursday, November 29, 2001

You may have missed it in the holiday rush. But the Social Security reformers won another big victory in the special congressional election in Arkansas last Tuesday.
The Republican candidate, John Boozman, supported President Bush's proposal to allow workers the freedom to choose to save and invest some of the money they now pay in Social Security taxes in their own personal retirement accounts.
But the Democratic candidate, state Rep. Mike Hathorn, bitterly opposed such reform. He called it a risky scheme to gamble Social Security in the stock market.
Any problems with Social Security? Mr. Hathorn said in his ads not to worry because "Social Security is a covenant between our government and the people who have worked to make our country great."
The fact is Social Security has become a very poor deal for working people today. At even half the average return earned in the stock market over the last 75 years, a personal account would pay families two, three and even four times what Social Security promises.
For some workers, Social Security is such a poor deal that it's like paying the bank to hold your money rather than getting interest.
Moreover, we know from the government's own reports that Social Security will not be able to pay all its promised benefits to today's workers. Talk about risk. The Social Security benefits promised to young workers today are beyond risk. They are certain to be cut without more fundamental reform. In the end, the brain-dead scare tactics and sloganeering of the Democratic campaign failed. Mr. Boozman won 54 - 41.
Some think the Democrat did well to make the race close in a longstanding Republican district. But given the campaign Mr. Hathorn ran on other issues, the truth is there was no Democrat in this race. There were in reality two Republicans, one for Social Security reform based on freedom of choice and personal accounts, and the other against it. And the one for it won.
A strong helping hand was provided to Mr. Boozman by the pro-reform For Our Grandchildren campaign. They put $25,000 in the race in the last week to pay for 20,000 calls into the district explaining that the proposal endorsed by Messrs. Bush and Boozman would simply give workers a free choice to put part of their taxes in their own directly owned and controlled personal investment account.
This was critical because Mr. Hathorn's ads were slyly crafted to lead voters to think Mr. Boozman was proposing to have the government invest Social Security funds in the stock market. Polls show the public is bitterly opposed to that idea.
But for several years now, the polls have shown consistently strong majorities favoring a true personal account option, with workers investing the money through their own accounts.
The For Our Grandchildren campaign is now planning to expand its support of pro-reform candidates in next year's elections. It plans to target at least 15 races for TV and radio ads and phone banks explaining the benefits of a true personal account option.
The Arkansas race is the second time this year that the Democrats' head-in-the-sand, scare tactics on Social Security have failed in a special congressional election. Last summer, Randy Forbes was elected in Virginia supporting personal account reform in the face of the same kind of unreasoned assault. The demagogic tactics have yet to win anywhere in any truly contested race.
But to continue these successes through next year's mid-term elections, Republicans and progressive Democrats need to more aggressively frame the issue early on in their races. They need first to explain more clearly what they are for, a true personal account option, so that the opponents cannot distort their proposal.
They then need to campaign affirmatively on all the positive features of such reform better benefits for workers, reduced burdens on Social Security, personal ownership and control of the accounts, and more opportunity and prosperity for lower-income workers and minorities.
Moreover, pro-reform candidates should specify key features of the reform proposal to short-circuit criticism. For example, the many countries that have successfully adopted personal accounts have all included guaranteed minimum benefits for workers with the account.
Reformers here should emphasize this as well, supporting a guarantee that workers with personal accounts could not receive less than they were promised by Social Security. That would cut short hysterical attacks that workers with personal accounts "could lose everything."
We are in the middle of one of the most exciting and promising domestic reform battles of the last 100 years. This is the time for all truly progressive reformers to join the fray.

Peter Ferrara is an associate professor of law at the George Mason University School of Law.


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