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Democrats See Scandals as Chance to Attack Privatizating Social Security
By:
Alison Mitchell
WASHINGTON, July 12 — Seizing on the Wall Street scandals to press their agenda on Social Security, Democratic leaders in Congress demanded today that President Bush and his party renounce efforts to shift part of Social Security into private investment accounts. With investor fears dragging down the stock market, Senator Tom Daschle of South Dakota, the majority leader, aimed at Mr. Bush, who advocated in his presidential campaign that workers be able to shift part of their Social Security payroll taxes into private investment accounts similar to 401k's. "President Bush campaigned on a promise to privatize Social Security," Mr. Daschle said at a news conference. "He was very clear about it. He wanted to end Social Security as we know it. "A lot of us thought that idea was a bad idea two years ago, when the Dow was going up every week. After what's happened to the stock market in the last few weeks, we think it's a terrible idea." Democrats have been using Social Security as a campaign issue all year, and today they appeared particularly bold, an early sign of how the debate on corporate responsibility is spilling into other issues. Beyond the posturing, the debate has potentially long-term repercussions, not just for politics, but also for policy. Republicans worry that if the market does not turn around soon, the president's ideas for Social Security will become untenable. The Democrats' broadside brought countercharges from the White House and Republicans that Democrats were playing politics with retirement security. Senator Trent Lott, the Mississippi Republican who is the minority leader, said, "When all else fails, political scoundrels scare old people." Mr. Lott also went out of his way at a news conference to sidestep talk of private accounts, saying: "We need to have a national discussion about this. We need to be calm about it. We need to take our time." Although their approaches differed, both parties counted for a time in the boom years of the 1990's on harnessing the returns of the market as one element of plans to ensure the solvency of the Social Security system as the baby boom generation retired. President Bill Clinton eventually shelved as unworkable the Democrats' idea of having the government, not individuals, do the investing. Mr. Bush, in his presidential campaign, indicated that he wanted his legacy to include overhauling Social Security and Medicare. Congressional Republicans considered the issue too incendiary to take up in the year before a midterm election, when the elderly are the most reliable voters. House Republicans also did not want to be forced on the record on such a vote when they knew that such a plan would never get though the Democratic-controlled Senate. The White House was not pushing for action either. Republicans who back individual investment accounts now worry that depending on how long middle-class investors lack confidence in the market it could become politically impossible for years to create a privatized option as part of Social Security. "In the current climate and environment we're in, I don't see how you are going to get an enlightened debate on Social Security reform," Senator Chuck Hagel, Republican of Nebraska, said. The two parties are also waiting to see whether the market could unexpectedly boomerang. About half of American households own stock. Perhaps even more important for the midterm elections, David Winston, a Republican pollster, notes that 71 percent of those who voted in House races in 2000 held stock. "What's happened here," Mr. Winston said, "is 401k's and I.R.A.'s have become very commonplace in the average American household." Two years ago, conservative strategists said, the jump in stock ownership was changing the traditional politics of Social Security. Although Democrats were still able to appeal to the elderly, the strategists said, younger voters more comfortable with the stock market were finding the Republican idea of partial privatization of Social Security appealing. Now Democrats say their signature issue of protecting Social Security has resonance not just for the elderly, but also for a broad swath of the middle class that has watched its 401k's and mutual funds lose value. "It should be clear to everyone now that the stock market provides no guarantees," Senator Jon Corzine, Democrat of New Jersey, said today. The debate amounted to a kind of shadowboxing. The Republican proponents of individual investment accounts do not want to talk about the idea now, in an election year. It is the Democratic opponents who want to force the debate while attention is riveted on corporate scandals and the sagging stock market. Representative Robert T. Matsui, Democrat of California, said, "This is an issue that should be debated and voted on now." Minutes later, Mr. Lott said: "We're not going to act in this area this year. They know it. We know it. And hopefully the senior citizens know it." FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Action on Aging distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
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