WASHINGTON - When you retire, should you expect your standard of living to go down, stay the same, or gradually rise along with society in general?
That, in a nutshell, is what the Social Security debate is all about. And it's why President Bush is likely to lose it; nobody wants to tread water for the rest of his/her life.
Americans tend to think that when they retire, because of regular increases in Social Security benefitsd, now pegged to wage increases, they will keep up with their friends and their neighbors. Yes, they know they won't be rich and that they'll have to "make do" and be careful with spending. But they don't expect to become second-class citizens or fall into poverty, even though fewer and fewer employers are providing pensions.
The White House says that because there used to be 16 workers supporting everyone on Social Security, and there will be only two workers supporting each retiree, benefits must be cut for future retirees (not those near retirement or already there). Democrats say that is true, but that there won't be a true crisis until Social Security runs out of money, possibly in 2042, and that changing the nature of the program in a major way is unwarranted for now.
The administration says the future is now and suggests cutting the growth of benefits by pegging increases to inflation, which tends to rise slower than salaries. Because this could cut benefits of future retirees by as much as a third of what they otherwise would be, Mr. Bush wants to let workers put into private accounts part of the payroll taxes they now pay into Social Security. The money would be invested in mutual funds or bonds that could be tapped to make up for smaller benefits.
The administration assumes workers would be willing and able to manage their accounts to improve their future standard of living. The administration also is betting that commissions and administrative costs would be kept in check, that the stock market continues to rise, that fraud and theft would be avoided. The administration argues that borrowing $2 trillion for the transition would not harm the economy, even with a record deficit.
Critics say a better answer is raising the payroll tax or delaying the age when benefits may be collected beyond 67.
Mr. Bush says no. He says this is a generational problem. Polls show young workers don't expect Social Security to be there when they need it and are less averse to the risk of private accounts than older people. They like the idea of potentially making more than they'd get in Social Security benefits and passing on any leftover savings to relatives if they die young.
But other workers worry that they might outlive their savings, that the markets might not perform well, that administrative fees could eat up their profits and they could lose money, having less in retirement than they would under the current system. They fear it would be like living on less than half of their 1980 earnings in the world of 2000.
Now that Mr. Bush has started an all-out campaign to "strengthen" Social Security by rethreading the strands of the long-promised safety net, polls show that half of Americans are nervous about this. Sen. Edward Kennedy (D., Mass.) says he thinks Mr. Bush's motivation is ideological. He is convinced Mr. Bush wants to scrap the 1937 Social Security program signed into law by Franklin Roosevelt. "It's not a mystery. Social Security is one of the great Democratic programs, and Republicans such as Newt Gingrich have wanted to see it unravel for years This is an attempt to undermine and destroy Social Security."
Mr. Bush's retort is that he wants to create an "ownership society" where people have more control over what happens to their finances.
Some Democrats say they might agree to voluntary private accounts if they are supplemental and don't divert payroll taxes. But they insist Social Security is a pay-as-you-go contract with Americans that must not be broken and that if Mr. Bush succeeds, his changes would commit the elderly to poverty.
They also point out that millions of the disabled and children whose parents die before the kids turn 18 depend on Social Security and that Mr. Bush has yet to explain how they would fare. Those Democrats - and some Republican officeholders who worry that Mr. Bush's plan is political suicide for them - say there is time in the 37 years before the Social Security trust fund runs out of money to make the adjustments needed to keep it going.
Democrats predict Mr. Bush will fail to convince Congress that diverting payroll taxes into private investments is the right solution. Mr. Bush predicts he'll succeed when Americans see the facts.
The answer is a bipartisan compromise. So far, there is none on the horizon. But it's early. Here's predicting we'll be kicking the Social Security football down the road for a long time.