Liberals Wary of Clinton's Resolve on Social Security

By: Richard W. Stevenson
The New York Times, March 10, 1999

Gearing up for a major battle to preserve Social Security's guaranteed benefits, organized labor's ostensible targets are the Republicans in Congress who support reshaping the retirement system to include private accounts. But the unions, joined by an array of women's groups, civil rights organizations and other liberal advocacy groups, are just as worried about being sold out by the Clinton Administration in the name of bipartisan compromise.

So even though the Administration has so far lined up against making private accounts part of Social Security, the politically powerful constituency groups on the Democratic Party's left wing are sending a not-so-subtle message to the White House and Vice President Al Gore: We saved your bacon by getting out the vote for you in the 1998 midterm Congressional elections, and if you cross us now on Social Security, it will cost you in 2000.

"Not only do we not want Bill Clinton's legacy to be a bad deal on Social Security, but excessive eagerness to create that legacy could hurt Al Gore in the elections in terms of people's willingness to work for and support him," said Roger Hickey, co-director of the Institute for America's Future, a liberal advocacy group that helped create a coalition fighting Social Security privatization.

"There is the potential for a wrong turn by the Administration," Mr. Hickey said. "There is the potential for a compromise that would undercut the Social Security system."

Administration officials acknowledged that they were in a balancing act, trying not to alienate their core supporters within the party but leaving open the door to a bipartisan compromise.

Any deal this year, Democratic strategists suggested, would almost certainly require Republicans to give up on establishing private accounts within Social Security, perhaps in return for the President agreeing to substantial tax cuts. The burgeoning Federal budget surplus, they said, could provide room to give both sides enough of what they want to make a deal possible.

Certainly, unions and other liberal groups have little concrete to complain about so far. The proposal Mr. Clinton made on Social Security in his State of the Union address in January matched almost precisely what labor had been advocating. Mr. Clinton proposed to keep the guaranteed retirement benefit intact, to address the retirement system's looming financial problems largely through use of projected budget surpluses, and to give low- and moderate-income workers incentives to save and invest through a new class of accounts independent of Social Security.

The private accounts advocated by Republicans would come out of the payroll tax workers and employers pay to finance Social Security and would in most cases involve a reduction in the guaranteed retirement benefit provided by the system. The accounts proposed by Mr. Clinton would not touch the payroll tax or alter Social Security benefits. Instead, they would give workers an incentive to save through tax credits and possibly Government grants.

Liberals and unions in particular remain unconcerned that even Mr. Clinton's approach to assuring Social Security's long-term solvency might ultimately require steps that they vehemently oppose, including raising the retirement age and reducing cost-of-living adjustments.

But the major problem, as many liberals see it, is Mr. Clinton's flexible principles on social issues. The President's wanderings across the ideological spectrum on welfare, health care and the budget have left them worried that he will sell them out if it is to his political advantage.

The suspicion burst into the open last week in Congress, when Representative Robert T. Matsui of California, who is the Democratic Party's point man on the issue in the House, worried aloud at a hearing that the Administration could reverse course on Social Security.

Speaking to Lawrence H. Summers, the Deputy Treasury Secretary, Mr. Matsui said his support for the Administration's efforts on the issue had to be tempered "lest you pull the rug out from under me."

But the success of liberal groups in helping turn last fall's Congressional elections into a victory for Democrats - and Mr. Gore's need for their all-out support next year - has given unions, black groups, women's organizations and other left-leaning constituencies what they regard as new leverage with the White House.

"When the President announced his plan on Social Security, we were very pleased," said Gerald McEntee, the president of the American Federation of State, County and Municipal Employees.

Mr. Clinton's decision to begin negotiating over Social Security from the left was partly "a reaction to the political dynamics of the midterm election," Mr. McEntee said.

"Now the question is where we go from here, how much negotiation takes place," he said. Union members are already paying close attention. A member of Mr. McEntee's Indianapolis local, Shane Brinkman, spent several days last week at a union seminar near here on what the debate over Social Security means for labor. Afterward, Mr. Brinkman was eager to get back home to make the case against overhauling the retirement system to include individual investment accounts.

"We live in this information age with E-mail and alphanumeric pagers and cell phones, but there's nothing better than having someone in your union, in your shop, give you the facts," Mr. Brinkman said. "It's old-time grass-roots politics."