That's not what Democrats will say. In fact, John Kerry declared in the presidential campaign that Bush's "January surprise" would be a 40 percent cut in benefits. As we've noted, there's some truth to that, though reduced benefits would be offset by investment account earnings. Of course, sticking with the current rate of benefit increase would require massive borrowing or a huge tax increase or both. Republican senator Lindsey Graham of South Carolina advocates 6 percent accounts paid for by boosting the cap on wages subject to payroll taxes from $87,900 to $200,000. This way, Democrats might support reform, he says. But Bush last week rejected any payroll tax hike.
Is this getting complicated? I'm afraid that can't be avoided. What's simple, though, is the argument of Republicans who want Social Security reform to consist of investment accounts alone. It's a purely political argument: Should Bush propose to slow the growth of benefits, Social Security reform is doomed. It just won't pass. Yes, the Democratic argument that Bush would cut benefits is demagogic. But it will generate sufficient opposition to kill any chance of reform. AARP, by the way, is already opposed.
The two camps reach beyond the White House and Congress. On the president's side is Glenn Hubbard, the former chairman of Bush's Council of Economic Advisers. Hubbard recently briefed Bush on reform issues. Others favoring action on the solvency side are influential economist Kevin Hassett of the American Enterprise Institute and ex-Bush economics adviser Larry Lindsey. Both are part of White House
discussions. Opposed are Republican bigwigs Jack Kemp and Newt Gingrich, plus Steve Moore and Peter Ferrara of the Club for Growth and an unknown number of members of Congress, all of whom prefer to push for investment accounts alone. Critics call this second camp "free-lunchers."
Oh, yes. There's a third camp, those who would do nothing on Social Security because insolvency won't be a threat for a decade or more. House Majority Leader Tom DeLay has privately questioned whether it makes sense to tackle Social Security now. After all, Republicans worked for years to gain control of Congress. Why jeopardize that by provoking a fight over Social Security?
Sorry, but the fight is unavoidable. Bush made it so by emphasizing Social Security in his speech to the Republican convention last summer. At the time, he rejected advice that he scale back his plans for reform. Now he has to find a way to enlist wary Republicans. Rove has talked to both Kemp and Gingrich. Others, like Moore, may join Bush if that's the only way of getting private investment accounts. When six senators and 12 House members were briefed recently, a senior Bush aide said he "didn't sense there were a lot of free-lunchers in the room." So achieving Republican unity is possible. It's also necessary.
Fred Barnes is executive editor of The Weekly Standard.
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