Will the Dems wake up and take W on in the second term? We will get an answer to that question early on. Watch the Social Security debate for your initial clues.
To explain, let’s return briefly to Roger Lowenstein’s piece in the NYT Magazine:
Ideally, Congress would recognize that the [SS] surplus is only temporary and would, therefore, take pains that the money lent to it is properly saved — that is, that it run a surplus. But the government is operating at a deficit. So you must conclude that rather than saving Social Security’s surplus, the government has been spending it — on the military, education, tax cuts. In only 15 years, the government will have to start repaying its debt to Social Security. It will be able to do so. If need be, it will borrow, as it has borrowed for many purposes since 1776. The amount of borrowing, which could very gradually scale up to 1 or 2 percent of the country’s gross domestic product, will be far smaller than the present federal deficit, which is just under 4 percent of G.D.P. But to avoid layering one deficit atop another, the government needs to exercise discipline — to not overindulge in candy — in the years when Social Security is running a surplus.
Here’s how this works (and I’m no expert at all). During some periods, Social Security operates at a surplus (for demographic reasons). During those years, the surplus money is put into U.S. treasury bonds and the governement spends that money when it needs it. Essentially, the government is borrowing money from future Social Security recipients.
When we are operating at a huge deficit, we need to borrow more. That is what endangers the system more than its existing structure.
So, if you are about 45-50, what is the biggest threat (assuming there is a threat at all, which is a point we shouldn’t give on) to your future Social Security check?
The tax cut and the wanton spending of the Bush administration.
That is an example of the way the Dems need to start framing issues. Will they?
The tax cut favors big business and wealthy individuals. The deficit that results hurts those who need money the most. Guess what? Privatizing Social Security helps big business and those who are shareholders (the rich). The folks who come up with these plans understand who gets helped and who gets hurt.
You don’t really think it’s a coincidence that we have run huge deficits under Reagan, Bush and Bush, do you? Come on folks, these guys cut taxes on the way to war.
But unless these debate points are re-framed, team GOP will continue to steamroll over the Dems.
Let’s start with this simple line of thinking.
We don’t have a Social Security problem. We have a tax cut problem.