Now Firmly In Power, GOP Begins Overreach - Undermining Of Bush Second Term Agenda To Follow
by Steve Soto
Bush has now said that he will be ready to propose his Social Security privatization plan by February, but he will find very shortly that his own allies in Congress will pose as much of a problem as the Democrats will this year. There is little across the board support for Bush’s plans on Social Security amongst the GOP majorities in both houses, and the emboldened conservatives within the GOP are already coming out of the woodwork with schemes to undo whatever political support Bush may have with moderates for his agenda. When you see people in his own party want to undo the Leave No Child Behind act, and rewrite the Medicare drug benefit, you can quickly see how Democrats can argue that Bush may have nothing to show for six years of GOP control except a failed war in Iraq and another upcoming war in Syria.
Democrats will be able to argue that Bush’s election in 2004 has unleashed the lunatic right wing fringe upon the country, and paint both Bush and his soon-to-be out of control conservative gangs in the House and Senate as being extremists out of step with the rest of the country. In other words, this is just what Rove was hoping to keep under control until more seats could be cemented in place from the 2006 midterms. And that is before Bush uses any of his alleged political capital for the Social Security battle ahead.
Before we get too far into this, I restate my main point: Social Security is not an investment vehicle, it is old age insurance. As such, if the program’s long-term solvency can be improved with increasing the taxable earnings ceiling, reconsidering Bush’s tax cuts and redirecting revenue from a reversed estate tax cut into the program, raising the retirement age, and bringing more workers into the program, then you have undercut the solvency argument behind Bush’s approach, leaving you with the issue of rate of return, which is irrelevant to an old age insurance program that is already efficiently run. What you are left with is the dubious method offered by Bush to finance his privatization, namely the borrowing of trillions of dollars on top of his existing deficits to finance the transition to partial privatization.
Ron Brownstein in the Los Angeles Times today points out that it is this borrowing scheme that may undo Bush’s plans, as it turns out that Wall Street isn’t necessarily sold on the GOP’s “borrow it” approach. Plus, the long-term debt service burden to the federal government from such a plan would crowd out other spending (of course) and exceed the cost of the current program. And again, as the Center on Budget and Policy Priorities tells us, there are alternatives to what Bush is proposing that will work without drastic benefit reductions.
It also turns out that for all the huff that Bush is making about the alleged problem with Social Security’s long-term costs and the program’s alleged looming insolvency, the program Bush just “reformed”, Medicare, has a problem seven times as large as the one facing Social Security. Yet Bush isn’t addressing that one, a problem whose roots are found in the rising cost of health care and hospitalizations, as well as a spiraling cost in the out years of the Medicare Part D benefit. Why? Because to do so would be admitting that Bush screwed up in turning the drug benefit into a Big Pharma and HMO piece of corporate welfare, which has now added another $8 trillion to the long-term problem for Medicare. When Bush removed drug price control mechanisms from the drug benefit bill to ensure drug company profits, he set Medicare up to fail. In one case, he is helping his drug company campaign contributors while Rove can claim that seniors are being helped. In the other case, Social Security privatization, he is claiming that a shortfall a fraction of the size of the one he just created with Medicare needs immediate attention and can be fixed by shoveling more money to other campaign contributors, namely Wall Street investment firms. And while the GOP does nothing to deal with the overall cost of health care in this country, Medicare’s costs skyrocket and become a problem much faster than Social Security.
So what is the GOP’s solution? Easy. Ignore the problem you have created with Medicare, hype up a problem with Social Security, and then go after the poor and cripple the states by slashing money from Medicaid. I’m sure those red state, low income voters will applaud Bush’s moral values while their children lose the only health care their families know.
So, if you are Nancy Pelosi and Harry Reid, what do you do? Is it best for Democrats to start the fight by simply opposing all Bush proposals with harsh rhetoric and pointing out who will be hurt by his evisceration of the safety net? Should Democrats offer solutions of their own at this point and contrast them with Bush’s and those of the lunatic fringe in the GOP leadership? Or should the Democrats sit back for a little while longer and watch the unraveling begin amongst Bush and the monster he has created?
I continue to take the position that the Democrats need to argue the basic premise behind privatization: it can’t be afforded due to Bush’s own fiscal policies; it isn’t an investment vehicle but rather an old age safety net; it isn’t clear that voters want that much choice in guaranteeing their old age security; and improvements in the program can be made without the risk and private interest proposed by Mr. Bush but not supported by many in his own party. Overall, Democrats need to ask why Social Security needs to be scuttled through privatization, low-income children and families need to have their health care scuttled, and drug companies and HMOs need to destroy Medicare while Mr. Bush’s base maintains its tax cuts and his foreign policies grab $100 billion a year we could use here at home.
It's an argument that Bush and the GOP cannot win, and the Democrats need to spend every day between now and the next Rove misdirection making this case.