Social Security reform can be bipartisan
WASECA, MINN. — As Democrats in Congress continue to reject President Bush's overtures to work together to strengthen Social Security, it's worth remembering that a bipartisan consensus for reform existed long before the president put this issue on his agenda.
In fact, Aug. 1 was the fifth anniversary of the Democratic Leadership Council's Hyde Park Declaration. Signed in 2000 by more than 70 elected Democrats across the country, including last year's presidential nominee Sen. John Kerry and current senators Evan Bayh, Joe Lieberman, Mary Landrieu, and Blanche Lincoln, the declaration mirrors President Bush's current effort to strengthen Social Security in several key areas:
• The declaration acknowledged the fiscal troubles that "big entitlements" like Social Security face and that the growth of these programs "will eventually bankrupt them." Similarly, Mr. Bush has warned that the Social Security system faces bankruptcy unless Congress acts promptly and decisively.
• The declaration called on leaders to "honor our commitment to seniors" by making the major entitlement programs - including Social Security - solvent. This is consistent with the president's repeated statements that Social Security must be made permanently solvent, not left as a problem for future generations.
• The declaration stated that "we must find a way to contain future costs" of entitlement programs such as Social Security. It argued that "Social Security and Medicare need to be modernized to reflect conditions not envisioned when they were created" and that Congress should enact "structural reforms that restrain their growth and limit their claim on the working families whose taxes support the programs."
These principles are precisely what Democratic business executive Robert Pozen's proposal for "progressive benefit growth" would accomplish for Social Security. Mr. Pozen was a fellow member of the president's bipartisan commission to strengthen Social Security. Under this approach, which has been publicly touted by Bush, benefits for low-wage retirees would grow at the full rate promised by the current program, while benefits for higher-wage retirees would grow at a somewhat slower rate. This slower rate of benefit growth for better-off retirees would help put Social Security back on a sustainable track. All future retirees, however, would receive higher benefits than those received by today's retirees.
Under progressive benefit growth, a low-wage worker retiring in 2050 would receive annual benefits of around $12,800 (in 2005 dollars), which is 42 percent more than a low-wage retiree today receives. A middle-income retiree in 2050 would receive around $17,100 in annual benefits, which is 16 percent more than today's middle-income retirees receive.
In short, benefits would grow, and they would grow most quickly for those who most depend on Social Security.
Despite these facts, many congressional Democrats - including some who signed the Hyde Park Declaration calling for "structural reforms that restrain" entitlement program growth - erroneously attack the president's plan as "cutting benefits."
The declaration also calls for the creation of "Retirement Savings Accounts to enable low-income Americans to save for their own retirement" and "shifting the focus of America's antipoverty and social insurance programs from transferring wealth to creating wealth." In fact, President Clinton called on participants in the 2000 Hyde Park effort to "meet the challenge of an aging America by extending the life of Social Security ... and helping working families to establish their own retirement accounts so that more Americans have a chance to create wealth."
Again, there are remarkable parallels between the declaration and Bush's efforts. The president has proposed letting younger workers save part of their payroll taxes in a voluntary personal account, giving them the chance to build a retirement nest egg of real savings for their families. The money invested in these accounts could be placed in Treasury bonds, meaning Americans would bear no additional risk.
Given the similarities between the Democratic Leadership Council's document and what Bush is proposing, one would expect that an agreement to strengthen Social Security for future generations would be easily reached. So far, that hasn't been the case.
Instead, Democratic legislators have not only attacked every serious proposal to fix Social Security, they have even attempted to deny the seriousness of the problem itself.
There is, however, still time for Democrats to do the right thing for our children and our grandchildren. All that is required is for elected officials to put politics aside and join together in forging a bipartisan solution to Social Security's problems.
• Tim Penny is a former Minnesota Democratic congressman. He served as a member of President Bush's bipartisan Commission to Strengthen Social Security and is currently advisory board chair of For Our Grandchildren, a Social Security education program.