Reforming Social Security is almost certain to figure prominently in President Bush's reelection campaign next year, pitting pro-privatization Republicans against Democrats worried about the ups and downs of a market-based pension system.
A source close to the president's reelection campaign said Bush will run "big time" on revamping the Social Security system, a longstanding conservative goal.
And last month White House spokesman Ari Fleischer buttressed that remark, saying Social Security reform "remains a very important priority for the president."
Fleischer indicated that now may not be the right time for that debate, given that Congress has been preoccupied with Medicare and AIDS legislation.
Asked if the right time is after the 2004 elections, Fleischer said: "I think the president will make that judgment as he works with the congressional leaders to determine when they believe the time is right so that it can actually do more than be debated but actually can be enacted."
Rep. Paul Ryan (R-Wis.), a member of the House Social Security Subcommittee of the Ways and Means Committee, said reform could come in the 109th Congress. "What we'd like to do is run on it . so we have moral authority to act on it in '05," Ryan said.
A staffer for Rep. Sam Johnson (R-Texas), who also sits on the Social Security Subcommittee, agreed. "It will be, I predict, the big issue in the presidential campaign, on domestic [issues]."
Presidential politics and overhauling Medicare have stymied any genuine reform in 2003, Ryan said. And no one expects Congress or the White House to tackle a huge entitlement program such as Social Security in 2004, an election year.
Michelle Hitt, spokeswoman for Republican Sen. Saxby Chambliss (Ga.), said voters generally understand that the Social Security system, slated to go bankrupt in 2018, is nearing insolvency.
But, said Hitt, who also served as spokeswoman on the senator's campaign last year, there are political pitfalls involved in urging reform of a status quo largely supported by unions and older voters.
Chambliss, along with other freshman GOP senators, such as John Sununu of New Hampshire, Lindsay Graham of South Carolina and Elizabeth Dole of North Carolina, ran on reforming the Social Security system, among other issues.
Recalling Chambliss's 2002 race against then-Sen. Max Cleland (D-Ga.), Hitt said of the Cleland camp: "They took their national party line and screamed 'privatization' every chance they got."
She added: "In the wake of these Enron scandals, you have this real fear. People who opposed privatization and those kind of reform issues were able to capitalize on the mistakes of larger corporations."
But "reform" is hardly synonymous with "privatization," the Heritage Foundation's David John said, noting that reform would entail channeling savings into fiscally conservative, government-regulated mutual funds.
Although those funds, like all private-sector investments, would be subject to the vicissitudes of the market, they would certainly outperform the long-term return of Social Security accounts, said John, a research fellow in economics and finance. He added that the system's financial troubles worsen each year. "The younger you are, the longer you're going to have to live to break even," he said.
For an average white 30-year-old male, who is expected to die in his mid- to late 70s, the Social Security investment yields a negative 0.5 percent return over the course of a lifetime.
Most black men, one Republican staffer added, will not live long enough to draw on their pensions. Also, Social Security accounts, unlike the personal retirement accounts favored by conservative reformers, limit transferability. If a recipient's children are older than 18 and a spouse' s income exceeds that of the recipient, the recipient's Social Security investment will not stay in the family.
Dan Maffei, Democratic spokesman for the House Ways and Means Committee, said Social Security is not simply a pension plan, as Republicans portray it, but part of a multipronged social insurance program.
And Maffei said he doubts Republicans will try to make a campaign issue out of Social Security in the upcoming election cycle. "Just because Mr. Fleischer says they're going to focus on this doesn't mean they are," he said.
Maffei cited the president's 2001 Social Security commission, co-chaired by the late Democratic Sen. Daniel Patrick Moynihan (N.Y.). "They came out with these recommendations, and then they buried them," Maffei said.
Rep. Robert Matsui (D-Calif.), ranking member on the Social Security subcommittee, added that privatizing the savings system would require far more seed money than is available and that it would endanger benefits.
Referring to President Bush, Matsui said: "He either has to drop the . privatization approach, or he's got to come clean with the American public and say, 'We're going to cut benefits.'"
The congressman also said he welcomed GOP plans to talk about Social Security during next year's campaign. "I'm glad he's finally going to ' fess [up] and talk about this."