- The Washington Times - Monday, February 25, 2002

Fully expecting the Democrats to play the Social Security fear card against them in the midterm elections, House Republicans are plotting a counter-tactic that dubious critics are calling "the son of lock box."
Republican leaders plan to pass a bill next month that promises retirees will get all the Social Security benefits due them. Under the bill, the U.S. Treasury will give a certificate of guarantee to each worker who reaches retirement age.
The idea of course is to inoculate Republican congressional candidates from charges that President Bush's plan to let workers invest part of their payroll taxes in stocks and bonds will eventually result in deep Social Security benefit cuts.
"I think we must adopt a simple strategy," House Majority Leader Dick Armey told his colleagues in a memorandum on how to handle the politically volatile issue in the elections. His plan: "(1) Assure Social Security recipients that their retirement security will be protected by the Republican Congress, while (2) we begin making the case forcefully and without fear or apology for wide-ranging reform of the system."
But the White House and Social Security reformers think Mr. Armey's idea, while politically clever, is fraught with unintended consequences that could undermine the administration's proposal.
First, any guarantee is not worth the paper it's printed on. Future Congresses could "amend or repeal such rights," a Congressional Research Service memorandum said last week.
Second, saying Social Security benefits will never be reduced contradicts the core rationale behind personal retirement accounts: As investments grow and yield much higher retirement income, dependence on Social Security will be reduced over time.
"You are creating a situation where you are locking yourself into a schedule of benefits," said Michael Tanner, Social Security analyst at the Cato Institute. "If I were the Democrats, I would let it pass and then do nothing to reform the system because you are going to be automatically funneling general tax revenue into the system, or raising taxes, to keep it going."
"There is no substance to this at all. It's all symbolism. It's a political move that does not do anything to reform the system," Mr. Tanner told me.
Andrew Biggs, a former staffer on President Bush's Social Security commission, calls the idea "the son of lock box." The lock box was a meaningless legislative device the Republicans used to convince voters that Social Security funds would not be spent. No one talks about the lock box now because the government is spending the Social Security surplus on the war against terrorism and homeland defense.
The White House has no intention of getting involved in the guarantee debate just yet, but Bush advisers do not like the idea. They say it diverts attention away from the debate for real reform and sends the wrong signal about their proposal. Says one adviser, "This is too clever by half."
In the end, personal investment accounts that workers own and can leave to their heirs is the only real guarantee that means anything, says one administration official.
There is no doubt the system needs to be reformed and soon. Every 10 seconds another Baby Boomer turns 50, Mr. Armey says, and in 10 years there will not be enough workers to fully support current benefits to a growing population of retirees. The so-called trust fund will be empty by 2038. Benefits would have to be cut by 30 percent.
Every government advisory group, including Mr. Bush's commission, has said the only way to reform the system is to create private retirement accounts to reduce the program's immense taxpayer liabilities on future generations.
But Democratic leaders are not interested in reform right now. They are focusing on how they can politically exploit Social Security fears among older Americans that will help them recapture the House and strengthen their hold on the Senate.
Democrats have been playing the Social Security fear card for years, notably in the 1982 and 1986 elections, and in the 2000 presidential race. Al Gore hammered away at Mr. Bush's reform plan in the last weeks of the campaign and pollsters say that it helped move the Democratic nominee's numbers up, particularly in Florida.
Democrats roadtested the issue again last year in the two special House races in Arkansas and Virginia. The GOP won both contests, but the issue showed that it had traction with older voters. Republican leaders think the Democrats, without anything else to run on in a wartime election year, will milk the Social Security issue for all it is worth this fall.
Mr. Armey's guarantee bill probably isn't going anywhere in the Democratic Senate, but that is beside the point. House Republicans want political cover in the elections and they say this bill will give it to them.
But maybe Republicans are underestimating the popularity of Mr. Bush's proposal. A Roper poll last month showed that nearly two-thirds of all Americans favored the idea of private retirement accounts, virtually the same support that a Gallup survey found late last year.
Despite the volatile ups and downs of the stock market over the last two years and the fallout from the Enron debacle, that is a remarkably bullish sign from voters that the Democrats' Social Security fear-mongering may no longer work.

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

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