Thursday :: Feb 17, 2005

Social Security Update: Bush Now Speaking To Half-Empty Halls While Greenspan Nixes A Rush To Privatization, Rejects "Crisis" Label

by Steve

Today’s Social Security update on how Bush may have bungled the conservatives' best chance to undo the New Deal:

Where Are The Stepford Crowds?

First, the Bush road show in New Hampshire on Social Security didn’t exactly wow the faithful yesterday. In fact, the White House couldn’t even fill the hall halfway yesterday with enough Stepford supporters.

For President Bush, Social Security reform tops a busy second-term agenda, but yesterday's stop on his campaign-style reform push brought little more than a collective ho-hum from Granite Staters.

White House aides collected empty chairs in an echoing Pease International Tradeport hangar before Bush took the stage since only about half of the 2,000 free tickets were taken.

And those who did come gave Bush a welcome that paled in comparison to his fall campaign rallies.

Greenspan Won't Be Getting A Christmas Card This Year

Worse yet, Greenspan’s testimony yesterday threw cold water on the "let’s move quickly" scare tactic, when Greenspan said that 1) private accounts won’t increase national savings; 2) private accounts won’t address the system’s solvency issues; 3) he cannot endorse the additional borrowing from the transition costs of private accounts; and 4) adding a 401 (k) option would be a better way to increase national savings.

Oh, and the best part about Greenspan's testimony just now is that Bush cannot use the "crisis" word any more.

Greenspan's Comments And Congress

I think what has changed the calculus for the White House is that Sir Alan gave the privatization doubters the political cover to go slow on private accounts yesterday.

Moderate Republicans in the Senate responded quickly to Greenspan's testimony, saying it bolstered their contention that Congress must not be rushed into a legislative response to Bush's plan. At least four Senate Republicans -- Olympia J. Snowe and Susan Collins of Maine, George V. Voinovich of Ohio and Lincoln D. Chafee of Rhode Island -- have publicly adopted that "go-slow" approach, contending that Congress must explore alternative strategies, especially for financing.

By my math, that makes it impossible for Bush to get 60 votes for privatization. Add to that the 29 House Republicans that Democratic Whip Steny Hoyer says are on record against taking money out of the system for private accounts, and you can see that it isn't even clear if Bush can win a vote now in either house of Congress.

Latest NBC News/Wall Street Journal Poll Shows Majority Opposed

And the latest NBC News/Wall Street Journal poll shows that Bush now has an 11% deficit in selling his private accounts. By a 51%-40% margin, those polled were against private accounts and of that 51%, a strong majority was firmly against the idea. The poll showed, consistent with other recent polls, that the preferred option for dealing with Social Security was to limit benefits for wealthy retirees. (And who says that voters are against class warfare?)

The survey of 1,008 adults, conducted Feb. 10-14, found that 51% Americans consider it "a bad idea" to change Social Security by allowing workers to invest payroll taxes in the stock market, while 40% think it's a "good idea." That is essentially unchanged since January, despite Mr. Bush's attempt to drum up support for the idea in the State of the Union address and a cross-country tour. The margin of error is 3.1 percentage points.
In a further sign of trouble for Mr. Bush, 60% of those who consider private Social Security investments a bad idea describe their position as "completely firm." By contrast, just 31% of proponents describe themselves that way; 68% say they could yet change their minds.
Among options for shoring up the solvency of Social Security, the most popular among those polled was limiting benefits paid out to wealthy retirees. The poll shows that Americans endorse that idea by a 64%-32% margin. Least popular is increasing the retirement age, which Americans oppose by 62%-32%. Increasing the revenue from the Social Security payroll tax -- an option Mr. Bush left open in a newspaper interview published Wednesday -- draws 51% support.

Worse yet, Bush doesn't even have support for his privatization/benefit cut plan in his red state base.

Keep Grover Away From Sharp Objects

And lastly, poor Grover Norquist can’t believe that Bush would abandon him and other conservatives by agreeing to raise the $90,000 cap on Social Security taxation, and indicates that he thinks Bush may be lying just to see if he can get the Democrats to bite on it, only to bludgeon them with an anticipated groundswell of support for private accounts.

But Bush's potential embrace of a higher wage cap could anger conservatives who have pushed for private retirement accounts.
Grover Norquist, a leading anti-tax activist and advisor to the White House on Social Security, said he did not believe that Bush would agree to raise the $90,000 cap, despite the apparent shift in his public negotiating position. But he acknowledged that the president's remarks would rattle some conservatives.
"Should it make us nervous when somebody says, 'I would think about cutting off your fingers,' even if you don't think he really would? Yes. It makes one nervous," Norquist said. "I understand that it's his job to say, 'Let's come to the table and have a conversation.' He's counting on the fact that once you get in the room, the American people will demand personal savings accounts, and they will not demand higher taxes."

Grover, it’s not going to happen buddy. If the polls already show that Bush can’t sell private accounts, and if Sir Alan now says that private accounts don’t address the system’s solvency issues, don’t increase national savings, and if he won’t endorse the large borrowing necessary for the transition costs, then congressional support as well as public support for private accounts will not materialize, no matter how many half-empty halls Bush visits.

Steve :: 10:08 AM :: Comments (15) :: Digg It!