Social Security Moment of Truth

Article excerpt

At a time when Bill Clinton and the national news media keep telling us that nothing much is happening in Congress, the idea of reforming Social Security to let workers invest in their own retirement plans is becoming the hot political issue of 1998.

A recent nationwide Associated Press survey found that 80 percent of those polled support the idea of having their own Social Security retirement accounts. And among younger workers up to age 34, nearly 90 percent support it. At the same time, citizen forums to promote discussion and debate about reforming the system are taking place around the country, leading to a planned White House summit in December.

The idea is also gathering steam in Congress where Democratic leaders like Sens. Daniel Patrick Moynihan of New York and Bob Kerrey of Nebraska are pushing reform bills of their own, along with Texas GOP Sen. Phil Gramm, who has introduced a more ambitious plan to privatize the entire system while keeping a safety net for those who need it.

And in the most dramatic sign yet that real change may be on its way, the powerful American Association of Retired Persons, the self-proclaimed national guardian of the centerpiece of the New Deal, says it is keeping an open mind on "all reform options," even Mr. Gramm's proposal.

"All of the political momentum is with the privatization movement right now and the advocates of the status quo are clearly on the defensive," says Steve Moore, the Cato Institute's chief economist.

Just a few years ago few politicians dared to touch the "third rail of American politics," but now it has become "an idea that commands majority support in the country," Cato President Ed Crane told me. Cato's web site, which lets working people compare the private investment return on their payroll taxes with Social Security's meager 1 percent to 2 percent return, is getting thousands of visitors per day.

"The electorate has made a decision that they want to see the personalization of social security where they own their own plans. And now the political culture is catching up to the curve," says Bill Dal Col, political adviser to Steve Forbes, who helped to pioneer this idea in his 1996 presidential campaign.

"Clearly, this is an issue, if handled properly, that has the potential to be one of the dominating issues of the coming elections," he said.

The speed with which the issue seems to be moving has taken many veteran policy experts by surprise, even those who have been promoting it for years.

Mr. Clinton clearly helped to move the debate forward by declaring it a major priority this year, kicking off a yearlong national dialogue about what needs to be done to reform the system. His administration has no reform plan, other than to refinance the program through debt repayment. …