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One almost has to feel sorry for Al Gore. It is not all that easy to feel sorry for the vice president who eviscerated Bill Bradley in the primaries by falsely claiming that Bradley wanted to slash Medicaid. It is not even easy to refrain from laughing when Gore goes into his "whiz kid" routine — claiming to have been in the potty while the Clinton/Gore re-election team schemed to defeat both Bob Dole and the election laws in 1996. And that Internet thing — well, enough said.
But Gore ultimately may be remembered for none of this. Instead, history may remember him as The Man Who Lost the Social Security Issue for the Democrats.
The 21st century in American politics began May 15, 2000. On that day, Texas Gov. George W. Bush proposed his "Saving Social Security" plan, which would allow workers to allocate 2% of their payroll taxes to individually controlled retirement accounts. But the real epochal news was what did not happen next: Gore was unable to portray Bush as the enemy of the poor and elderly, and Bush did not plummet in the polls. And at a stroke, the thermonuclear weapon in the Democrats' political arsenal proved to be no longer so lethal after all.
That is not to say that Gore did not try to bury Bush on the issue. He did. And he did it the old-fashioned Democratic way: with class and age baiting, and with a new spending plan. It just did not work. And that failure leads to a large and intriguing question: Can class warfare and age warfare work in the United States, circa 2000? Thus far, the Social Security debate of this campaign suggests that the answer may be "no" — but stay tuned for November.
Bucking the Historical Tide
It is difficult to overstate the courage that it took Bush to introduce his plan. Similar plans had been proposed in past years but only by candidates like Steve Forbes, who needed to take long chances just to remain visible in the presidential race. Bush announced his plan while leading Gore in most polls and having the momentum on his side.
A little historical perspective is necessary to appreciate just how bold Bush's plan is and how alarmed the Democrats should be about Gore's inability to undermine it. For more than a generation, Social Security has been the Democrats' most reliable issue on which to win by demagoguery. Most recently it, along with Medicare, was a key part of how the Democrats turned the Republicans' enormously popular "Contract with America" in 1995 into a detested "Contract on America." (This happened even though the contract mentioned neither Social Security nor Medicare.)
Politically, it worked — every time. And it worked in spite of a notable lack of truth in the allegations. Contrary to the allegations the Democrats made to terrify the poor and elderly, Reagan never proposed reducing Social Security benefits. Newt Gingrich never proposed any such thing, either.
And class and generational warfare worked so successfully that no Republican who seriously entertained thoughts of winning a competitive election could utter a peep of rational discussion of the problems facing Social Security. So for this most gigantic of all federal programs, the problems grew and grew and grew. Grew to almost $9 trillion of unfunded liability.
Gore's Lame Rebuttal
Gore began fighting back against Bush's plan the same day Bush announced it by invoking the traditional class-warfare curse word: privatization! But this time it didn't work.
This sea change had been foreshadowed by years of polling data suggesting that ever-larger numbers of young taxpayers saw the current Social Security system as a "risky scheme." But the high voter turnout of Social Security recipients, many entirely dependent on their monthly checks, for years overwhelmed the generations X and Y voters who have deep-seated questions about the plausibility of Social Security.
Gore finally did craft his own plan June 13. The essence of the plan was private savings accounts for lower-income voters (more class warfare), turbocharged by a "refundable tax credit" — which is another term for (surprise, surprise) more government spending!
Part of the underwhelming response to Gore's plan may owe to the fact that it is difficult to understand how a new spending program can be used to close an actuarial deficit. But part of the problem was that Gore, who has seemed unable to put a foot right since winning the Democratic nomination, tied his shoelaces together again by naming his plan "Social Security Plus" — the same name as a plan and Web site already created by ... Newt Gingrich!
Payback Time
Now that Bush has his political beachhead, Gore and his Democratic allies have a huge problem. For years, nearly all of what the Democrats offered about Social Security were class-baiting and age-baiting exaggerations and falsehoods. They succeeded by making it politically poisonous for Republicans to discuss the issue at all.
Now that Bush has put the issue into the realm of rational discussion, Democrats will be burdened by their past statements. Gore, for example, in April called Social Security "an unshakable covenant between generations," a variation on the longstanding claim that Social Security is a "pay as you go" system.
Try starting a pay-as-you-go pension plan at a company you own, and you will soon find yourself sued by the Labor Department. Such a plan for an ever-larger and ever-healthier beneficiary pool is no more than a euphemism for a pyramid or Ponzi scheme.
Democrats have known this all along. Indeed, one of the most successful pieces of social legislation ever enacted in the United States has been the Employee Retirement Income Security Act of 1974 (ERISA). This law has delivered to American workers the safest and most ample private pensions in the world precisely by prohibiting pension plans from operating the way Social Security operates. After decades of class and generational warfare, Democrats now face having to explain why what works for the secure ERISA pensioners had to be kept from Social Security recipients.
Social Security never was "an unshakable covenant between generations" or it never would have produced the lottery-like returns delivered to those who retired in the 1930s and 1940s, returns that hooked two generations of elderly voters on the Democrats. And any semblance of a "covenant" went out the window in 1972, when President Richard M. Nixon and the Democrat-controlled Congress, both seeking re-election at all cost, engaged in a ruinous bidding war over who could raise Social Security benefits more and faster, eventually settling on a 25% increase plus perpetual inflation indexing — changes that guaranteed the program never again would be actuarially sound.
With Social Security now a subject that can be discussed openly, the guardians of the status quo — the Democrats — have to explain why they never noticed this problem until George W. Bush brought it up. Poor Al Gore. If he had known that class and generational warfare would start backfiring on Democrats just as he became their presidential nominee, he might have stayed in Silicon Valley to work on his Internet.
