Paul C. Light: The Last Time We Fixed Social Security





Paul C. Light, in the NYT (3-5-05):

[Paul C. Light, a professor of public service at New York University and a fellow at the Brookings Institution, is the author of "The Four Pillars of High Performance."]

IT is almost 22 years to the month since Representative Barber Conable Jr. strode to the floor of the House to defend a carefully constructed plan to save Social Security. Mr. Conable, a moderate New York Republican with whom I then worked, spoke with characteristic understatement. "This is not a work of art," he told a packed chamber. "But it is artful work."

He was right. The $168 billion package eased the program through a turbulent period, and 1983 marks the last time Congress cut Social Security benefits, raised taxes and lived to tell about it. Before drawing too much inspiration from this history, however, we should recognize that this rescue was anything but assured when Mr. Conable and the other members of the bipartisan National Commission on Social Security Reform began work under the leadership of Alan Greenspan in February 1982.

Then as now, a president was ready to invest his political capital in Social Security reform. Despite his best efforts to convince the public that Social Security was going broke, Ronald Reagan got exactly nowhere. In May 1981 his budget director, David Stockman, proposed a deep cut in the early-retirement benefit available at age 62; in July there was the suggested elimination of the $122-a-month minimum benefit for the poorest beneficiaries; and in September word leaked out that Mr. Reagan was considering a three-month freeze in the annual cost-of-living increase.

With his public approval sagging under opposition to all these proposals, Mr. Reagan did what any beleaguered president would do: he pulled his foot off the third rail of the political subway and proposed a bipartisan national commission to study the issue. Scheduled to report by January 1983, after the midterm elections, the 15-member commission would, with luck, give the president time to recover before the 1984 campaign.

Then as now, there was little agreement that the program was actually broken. Republicans used worst-case economic assumptions to paint the most draconian future imaginable - and then best-case assumptions to sell their solutions. Democrats, in turn, used their own projections to minimize the Social Security problem, and the worst-case numbers to illustrate the impact of any benefit cuts.

Then as now, there was intense conflict on how to fix the program. As expected, Republicans said the best way to rescue Social Security was to reduce benefits, while Democrats sought to give the program breathing room by raising taxes.

Finally, then as now, Republicans worried about how Social Security would affect the midterm elections. Their concern was justified. With Social Security as the centerpiece of their "It's not fair ... It's Republican" advertising campaign, Democrats added 26 seats to their already substantial majority in 1982. ...

 


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