Social Security Is Not Health Care

Pundits and political leaders are warning that pushing Social Security reform has the potential to damage the Republican party much as the failed Clinton health care debate hurt the Democrats in the 1990s.

 

"I think the feeling among Democrats is we've been handed a gift," said Sen. Charles Schumer, D-NY, who chairs the Democratic Senatorial Campaign Committee.

 

Even Republican strategist and Weekly Standard editor William Kristol said, "If I were a Democrat today, I'd be looking at Social Security."

 

But the comparison is wrong. President Bush's Social Security proposal is very different from the health care reform plan offered a decade ago, for three main reasons:

 

1. President and Mrs. Clinton proposed major changes to the U.S. health care system that would have impacted the great majority of Americans. Their restructuring plan was mandatory, and their proposed Health Security Act contained in its 1342 pages a plethora of fines, penalties, and even jail terms to enforce compliance.

 

In contrast, President Bush is proposing Social Security reforms that are voluntary. There is no forced compliance. And polls show that young people who would have an opportunity to divert some of their Social Security taxes to personal accounts support the idea by the widest margins. The existing Social Security system stays the same for retirees and near-retirees. But young people, who find the idea most appealing, can voluntarily select new options.

 

2. The people who stood to gain the most from the Clinton health reform plan were the then 39 million people without health insurance coverage. But many people who were relatively comfortable with their health care arrangements would have been forced to change so that the country could achieve the social goal of universal health coverage. The famous Harry and Louise ads, in which a middle-class couple worries about how the Clinton reforms would affect them, played a big role in sinking the plan.

 

In contrast, older Americans aren't being asked to make any changes to their Social Security arrangements. Only today's young people, who say that they have little hope that Social Security will be there for them when they retire anyway, face prospective change.

 

They are being given a relatively low-risk option now to begin to save for their retirement and have the prospect of a decent return rather than face the near certainty of a system that won't come through for them.

 

3. The changes proposed in the Clinton Health Security Act would have taken place relatively quickly, without time for a gradual evolution that would have given people and institutions time to prepare and to figure out the least disruptive ways to adapt.

 

In contrast, the changes in the Social Security system will evolve over decades, not be forced over a few short years. That gives people, the government, and financial institutions time to fine-tune changes, create new options and opportunities, and learn what works best. Change would evolve gradually and affect only those who choose the new option.

 

For these reasons, those who believe that personal accounts are the right thing need not worry. Social Security reform offers voluntary choices rather than mandates, the people who stand to gain from the new system are those with the most to lose if nothing is changed, and the changes will be gradual.

 

In the 1996 Republican presidential primary campaign, outsider candidate Steve Forbes brought this issue to the forefront of the political debate, bravely touching the political third rail by talking about personal accounts in Social Security.

 

Whenever he stopped in college towns in New Hampshire or talked with crowds of young people, he was treated like a rock star. He took a risk, and other candidates saw that it actually was possible to talk about Social Security reform and to gain favor on the issue with voters.

 

Personal Social Security accounts are a winner. Be not afraid.

 

*****

 

Grace-Marie Turner is president of the Galen Institute, a not-for-profit research institution in Alexandria, VA, that focuses on health and tax policy. She was a policy advisor to then-presidential candidate Steve Forbes.

 

 

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Pundits and political leaders are warning that pushing Social Security reform has the potential to damage the Republican party much as the failed Clinton health care debate hurt the Democrats in the 1990s.

 

"I think the feeling among Democrats is we've been handed a gift," said Sen. Charles Schumer, D-NY, who chairs the Democratic Senatorial Campaign Committee.

 

Even Republican strategist and Weekly Standard editor William Kristol said, "If I were a Democrat today, I'd be looking at Social Security."

 

But the comparison is wrong. President Bush's Social Security proposal is very different from the health care reform plan offered a decade ago, for three main reasons:

 

1. President and Mrs. Clinton proposed major changes to the U.S. health care system that would have impacted the great majority of Americans. Their restructuring plan was mandatory, and their proposed Health Security Act contained in its 1342 pages a plethora of fines, penalties, and even jail terms to enforce compliance.

 

In contrast, President Bush is proposing Social Security reforms that are voluntary. There is no forced compliance. And polls show that young people who would have an opportunity to divert some of their Social Security taxes to personal accounts support the idea by the widest margins. The existing Social Security system stays the same for retirees and near-retirees. But young people, who find the idea most appealing, can voluntarily select new options.

 

2. The people who stood to gain the most from the Clinton health reform plan were the then 39 million people without health insurance coverage. But many people who were relatively comfortable with their health care arrangements would have been forced to change so that the country could achieve the social goal of universal health coverage. The famous Harry and Louise ads, in which a middle-class couple worries about how the Clinton reforms would affect them, played a big role in sinking the plan.

 

In contrast, older Americans aren't being asked to make any changes to their Social Security arrangements. Only today's young people, who say that they have little hope that Social Security will be there for them when they retire anyway, face prospective change.

 

They are being given a relatively low-risk option now to begin to save for their retirement and have the prospect of a decent return rather than face the near certainty of a system that won't come through for them.

 

3. The changes proposed in the Clinton Health Security Act would have taken place relatively quickly, without time for a gradual evolution that would have given people and institutions time to prepare and to figure out the least disruptive ways to adapt.

 

In contrast, the changes in the Social Security system will evolve over decades, not be forced over a few short years. That gives people, the government, and financial institutions time to fine-tune changes, create new options and opportunities, and learn what works best. Change would evolve gradually and affect only those who choose the new option.

 

For these reasons, those who believe that personal accounts are the right thing need not worry. Social Security reform offers voluntary choices rather than mandates, the people who stand to gain from the new system are those with the most to lose if nothing is changed, and the changes will be gradual.

 

In the 1996 Republican presidential primary campaign, outsider candidate Steve Forbes brought this issue to the forefront of the political debate, bravely touching the political third rail by talking about personal accounts in Social Security.

 

Whenever he stopped in college towns in New Hampshire or talked with crowds of young people, he was treated like a rock star. He took a risk, and other candidates saw that it actually was possible to talk about Social Security reform and to gain favor on the issue with voters.

 

Personal Social Security accounts are a winner. Be not afraid.

 

*****

 

Grace-Marie Turner is president of the Galen Institute, a not-for-profit research institution in Alexandria, VA, that focuses on health and tax policy. She was a policy advisor to then-presidential candidate Steve Forbes.

 

 

SHARE THIS ARTICLE

About the author