Doing Comparisons Right
| Fri Sep. 11, 2009 8:51 AM PDT
Apparently the LA Times has some kind of moronic deal that allows them to reprint Ron Brownstein's columns in their print edition but not online. So it's off to National Journal to see Brownstein's latest, ripped straight from the blogosphere and therefore old news to everyone here (Republicans are the Party of No; 
old-style coalitions have broken down; we're moving to a de facto parliamentary system; etc. etc.). It's basically fine, though, except for this one paragraph that's become pundit conventional wisdom lately:
It is revealing that Obama is facing nearly unanimous Republican opposition on health care just four years after President Bush couldn't persuade a single congressional Democrat to back his comparably ambitious Social Security restructuring.
I understand why people write stuff like this, and the parallels are strong enough to make it defensible. But is it really true?
Maybe I'm remembering things through partisan-colored glasses, but my recollection is that there are some pretty significant differences here. First, George Bush never sought out any compromise at all. He insisted on a pure, budget-busting carve-out privatization scheme and never gave Democrats so much as a chance to make a deal. But what if he'd made it clear that he was open to compromise? Say, part carve-out, part add-on, and with a modest collection of benefit cuts and tax increases to go along with it? I suspect a lot of Dems would have been open to something like that, but Bush never gave them a chance.
Second, it wasn't just Democratic opposition that killed Social Security privatization. Thanks to Bush's intransigence, his plan became so radioactive that even a lot of Republicans didn't support it. By the time Congress returned from its summer recess, it was obviously DOA and no bill was even introduced.
There are obvious superficial similarities between Social Security in 2005 and healthcare reform in 2009. But in the former, Bush outlined a purely conservative proposal and never gave an inch on it. In the latter, Obama has outlined a generally liberal proposal but allowed some give and take with Republicans. As Brownstein himself mentions, the plan's basic structure has support "from such Republican-leaning groups as hospitals, drug manufacturers, and the American Medical Association, which fought almost all previous reform efforts. Obama told the AMA last summer that he is open to some medical-malpractice reform, a top Republican priority. And for months, he has signaled his willingness to retrench on creating a public competitor to private insurance companies, the idea that most enrages conservatives."
The Social Security comparison will probably never go away because it's just too good a story. Too good to check, in fact. But it's only half true. The punditocracy really ought to stop peddling it.
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Comments
Not to mention that Obama
Submitted by Leitrim (not verified) on Fri Sep. 11, 2009 9:09 AM PDT.
Not to mention that Obama ran on and won a general election in which health care reform was front center as an issue, and he made reform part of his campaign. Bush sprung Social Securit privatization on the country after an election in which it was not an issue, and never mentioned by him as part of his platform.
That's just wrong. Bush ran
Submitted by M (not verified) on Fri Sep. 11, 2009 10:48 AM PDT.
That's just wrong. Bush ran in '04 with Social Security privatization about as "front and center" as health care was for both candidates in '08. It was in any number of his speeches -- look them up if you can stomach it.
Another key difference
Submitted by Dave Munger (not verified) on Fri Sep. 11, 2009 9:32 AM PDT.
Not to mention the fact that no one was being hurt by the imaginary "problems" with Social Security in the status quo.
No one supported my plan for all Americans to give me one dollar either. They weren't even willing to compromise on 50 cents apiece. That doesn't mean Obama's health care plan doesn't deserve support.
once bitten, twice shy
Submitted by pain perdu (not verified) on Fri Sep. 11, 2009 9:38 AM PDT.
Recall also that the Dems were still smarting from the experience of Medicare Part D, in which the Republican leadership in Congress made an elaborate show of involving moderate and conservative Dems in the Senate, then totally double-crossed them in conference committee by basically substituting the House bill. No Dem in his right mind would let the GOP leadership anywhere near Social Security after that. Add to that the transparent bad-faith rhetoric that Bush was employing to sell his proposal, and even the not-in-their-right-minds Dems were scared off.
A silly comparison
Submitted by RZ (not verified) on Fri Sep. 11, 2009 9:42 AM PDT.
Concurring with the first two comments above. Anyone who says the two approaches and results were similar is really only showing how superficially they examine the American political scene.
The fact is, most legislation that has been passed over the past 15 or so years has done so with minimal support from the opposition party. What the pundits are saying makes Soc Sec and health care proposals similar make virtually all legislative proposals similar these days.
Too Bad
Submitted by Go, Sestak! (not verified) on Fri Sep. 11, 2009 9:50 AM PDT.
We would have all done great with our social security invested in Lehman Brothers, insured by AIG.
Just to pile on following
Submitted by URK (not verified) on Fri Sep. 11, 2009 10:04 AM PDT.
Just to pile on following the excellent points above-there's even a memorable quote that pins to Bush's lack of interest in bipartisanship, the one about how he had "political capital" from the election. (ok, somewhat memorable- I don't have the exact words & don't have time to use teh google on it right now.)
Since comparison is all the rage for enterprising reporters here, how about a little contrast: Obama's near-obsessive bipartisanship with Bush's determination to use his side's "political capital."
Comparisons
Submitted by PGeorge (not verified) on Fri Sep. 11, 2009 10:22 AM PDT.
i think there are lots of comparisons between Bush's attempt to privatize social security and Obama's health care reform proposals:
For one thing: both are/were blatant attempts to enrich big business segments: the investment community in Bush's case, and Big Pharma and the insurance industry in Obama's.
The difference is that Bush was not smart enough to convince anyone that there were going to be any benefits to privatizing SS. The idea that old folk would be better off with their money in the stock market seems fine on a day when the Dow gains 100 points, and absolutely crazy when the Dow falls 100.
For Obama, it is easier to sell this sell out to the insurance industry by telling folks that pre-existing conditions will no longer be a reason to lose coverage, etc. And it IS a great part of a reform proposal.
Where Obama will have trouble is convincing Americans that being mandated to buy overpriced coverage from these same thieving insurance companies, without any mechanism that will drive down costs (like a robust public option) is going to be good for them.
It is silly for the Republicans to be against Obama's reform efforts: they are designed to reward their main constituencies; and Democrats will have no trouble coming on board once they realize that they have no reason to fear losing campaign monies from the insurance companies because they have all signed off on this massive give away.
So the only difference I see between Bush's plans and Obama's is that Obama will probably succeed. Maybe he'll turn around and work on social security next.
Besides the fact that the
Submitted by Anonymous (not verified) on Fri Sep. 11, 2009 10:50 AM PDT.
Besides the fact that the social security privatization wasn't even partisan. Republicans were running away from this as fast as they could, except for a few stallwarths, which forced Bush to take it on the road. At least Obama has a large consensus for much of his plan acceptable to most Democrats.
Privatization of Social Security was an objectively bad idea
Submitted by Nelson (not verified) on Fri Sep. 11, 2009 11:01 AM PDT.
Evidence bears this out. Over the last two years, my 401K account lost over half of its value. Where would I (or others) have been after retiring with a privatized Social Security account?
That picture of Bush is one of the most remarkable ever.
Submitted by Quiddity who can't login as Quiddity (not verified) on Fri Sep. 11, 2009 11:34 AM PDT.
To see the president wave a piece of paper from a filing cabinet and say that there is no "trust" in the special Social Security bonds was something I'll never forget. He was implying that Federal debt was not going to be repaid. That's something Lyndon Larouche might argue, but the President of the United States?
Thanks Kevin, for putting up that picture.
Quaddity, Yup. Hardly
Submitted by Trippp on Fri Sep. 11, 2009 1:28 PM PDT.
Quaddity,
Yup. Hardly anyone seemed to blink at the time but for me W, then President, was undermining about forty years of economic indoctrination that the safest, absolute bedrock security was in the US government.
Then Gonzales called the Geneva Coventions "quaint," and politicians started to seriously argue about whether we should torture people.
After the birthers started clamoring for Obama's papers I was like - Crap, I'm living in communist East Germany, and even though few people today seem to recall East Germany *I* recall it and I do NOT want to live in East Germany!
I like having a stable government with a stable financial system and the rule of law and civil rights dammit! For awhile there it seemed I was actually a traitor for liking that.
Well, maybe not.
Submitted by Brian on Fri Sep. 11, 2009 11:47 AM PDT.
Megan McArdle offers a different recollection:
http://meganmcardle.theatlantic.com/archives/2009/09/more_partisan_than_...
Megan needs to read more
Submitted by Bruce Webb (not verified) on Fri Sep. 11, 2009 12:55 PM PDT.
There were a range of possible Democratic and Bi-Partisan plans with Democratic participation. For example former Clinton staffer Liebman, former McCain staffer Maya MacGuineas, and former Bush staffer Andrew Samwick collaborated on LMS:
http://www.hks.harvard.edu/jeffreyliebman/lms_nonpartisan_plan_descripti.... Robert Ball a veteran of Social Security since it began and Commissioner under two Presidents had his own plan: http://www.centuryfoundation.org/list.asp?type=PB&pubid=531. In April 2005 Peter Diamond and Peter Orzsag reintroduced D-O http://www.brookings.edu/papers/2005/04saving_diamond.aspx
I think LMS is a horribly worker un-friendly plan, that D-O is reasonable enough given its premises, and that the Ball plan if mostly good though carries some long-term political dangers. But all of these were Democratic or Bi-Partisan plans that were on the table in early 2005. Bush never made an effort to reach out to any of them.
That Megan has no recollection of this is not surprising, all that was ever floated was the Posen Plan, where Posen was a tame Democrat who had served on CSSS and was firmly committed to Bush's six guiding principles. But to those who were actually involved in the issue at the time McArdle's stance is just rank revisionism.
Democratic plans
Submitted by Megan McArdle (not verified) on Fri Sep. 11, 2009 3:49 PM PDT.
You're attributing any private plan that every had a Democrat anywhere near it to the Democrats. By that standard, there are lots of Republican health care plans, including Wyden-Bennett. When people say that "the Republicans" haven't put forth a plan, they don't mean that no Republican, anywhere, has proposed a health care plan. They mean that the Republicans in Congress have not generated an alternative that could be negotiated. They haven't. Neither did the Congressional Democrats.
It's a bit rich to accuse *me* of "rank revisionism"
CSSS: Committee to Strengthen Social Security
Submitted by Bruce Webb (not verified) on Fri Sep. 11, 2009 12:37 PM PDT.
In 2001 Bush created CSSS a supposedly bi-partisan committee to study ways to 'strengthen' Social Security. It's guiding principles and a link to its ultimate final report can be found here.
http://govinfo.library.unt.edu/csss/index.htm
Despite all of Bush's later talk that "all issues were on the table" that wasn't true at all. Of the six bullet points three are key:
No. 3 "Social Security payroll taxes must not be increased"
No. 4 "The government must not invest Social Security funds in the stock market"
No. 6 "Modernization must include individually controlled, voluntary personal retirement accounts, which will augment Social Security."
Now it turns out that under the Intermediate Cost alternative a set of small phased in tax increases is probably the best way to go, if indeed we need to do anything. At Angry Bear we have devised something we call The Northwest Plan for Real Social Security Reform which shows that you can fix Social Security with a tax increase over the next two years totalling $1.50 in take home per week per median income family and then nothing until a similar set of increases might be needed annually for the decade starting in 2026. Instead of this sensible suggestion as even part of the fix, Bush ruled all increases out from the start.
Similarly there are a number of proposals out there, including the Ferrara Plan, which would have the Social Security Trust Fund diversified away from Special Treasuries into a more balanced mix of stocks, bonds, and yes Treasuries. Which if properly designed and with sufficient attention to risk might have been reasonable. Since only a small proportion of your 'investors' would ever need to start making 'withdrawals' in any given year this kind of mutual fund approach was at least worth discussing. But it too was ruled out from the start. Too socialistic or something.
Which left all 'negotiations' to be about how to structure private accounts. Operationally that is not much different from progressives. insistence on maintaining the public option in health care, but we never pretended we were being motivated by bi-partisanship.
Bush's proposal was "Let's gut the Crown Jewel of New Deal, the guiding principle of the Democratic Party for most of the 20th century, in a bi-partisan, piss on FDR and LBJs grave kind of way".
Luckily over the course of the Spring and Summer, and really due to nothing that Congress actually did, the There is No Crisis movement successfully derailed Bush's plan. Bush might have been able to get Democrats to sign on to something like the LMS: Liebman-MacGuineas-Samwick Bi-Partisan Social Security Reform Plan (Liebman now being the no. 2 guy in Obama's OMB but he decided to swing for the fences or to alter the metaphor go for the kill. There was no compromise in that mix.
Bravo and Amen!
Submitted by Detroit Dan on Fri Sep. 11, 2009 1:54 PM PDT.
I'm glad you posted this, and appreciate the comments also...
Social Security compromises offered by Bush
Submitted by Andrew Biggs (not verified) on Sun Sep. 13, 2009 12:11 PM PDT.
Kevin said: "George Bush never sought out any compromise at all. He insisted on a pure, budget-busting carve-out privatization scheme and never gave Democrats so much as a chance to make a deal. But what if he'd made it clear that he was open to compromise? But what if he'd made it clear that he was open to compromise? Say, part carve-out, part add-on, and with a modest collection of benefit cuts and tax increases to go along with it? I suspect a lot of Dems would have been open to something like that, but Bush never gave them a chance."
This isn't how I remember things and I was pretty closely involved. Some compromises made by Bush:
1. "Progressive price indexing," which balanced the system by cutting benefits for higher earners and left low earners exempt. They could stay in the current system, with no personal accounts if they chose, and receive everything that was promised. By contrast, the 2001 Commission's "full" price indexing would have reduced benefits across the board.
2. Progressive personal accounts: Accounts were (if I remember right) equal to 4% of earnings, up to a $1,000 max. So low earners could invest a larger share of their earnings, if they chose, and (in expectation at least) would receive larger proportional gains. Most conservatives would have favored a flat account structure where everyone invested the same percentage.
3. Open to raising tax max: in the spring of 2005 Bush shifted direction on taxes: previously the administration had opposed raising either the rate or the cap, but in interviews then-Treasury Sec. Snow refused to rule out raising the payroll tax ceiling. This made it pretty clear that the administration would have accepted a tax max increase as part of a deal.
Would the White House also have accepted a mix of carve-out/add-on personal accounts, as Kevin says they should have proposed? I have zero doubt that it would have.
In short, the Bush administration was open to exactly the type of compromise Kevin says they should have been. So why no deal? For one reason and one reason only: the Democratic leadership refused to even discuss reform until carve-out accounts were taken off the table. Now, maybe they thought this was a good political strategy and good policy, just as many conservatives think we should oppose health care reform unless the public option is taken off the table. But make no mistake that it was the Democratic leadership's position which precluded any Social Security compromise, not the Bush administration's.
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