February 15 2011
IWF in the News: Social Security Reform Needs a Winning Policy and a Winning Speech
One of the central complaints of President Obama's proposed budget is that it doesn't adequately address the fastest-growing component of the federal government: entitlement spending.
Gerald Seib at The Wall Street Journal noted that under Obama's budget, "spending will rise 71 percent for Social Security, 72 percent for Medicare and 115 percent for Medicaid over the same period."
But not all the frustration is pointed at the president. Conservative critics are equally concerned by the GOP's flat response when it comes to tackling entitlement reform.
Daniel Foster at National Review wrote about "A Nation of Cowards on Entitlement Spending," charging, "some of the selfsame tea-party heroes who raised hell over what amounts to one percent of the budget, are hemming and hawing on [Rep. Paul Ryan's (R-Wis.)] Roadmap and entitlement reform in general - non-committal at best and cowardly at worst."
As Republicans and President Obama sit down to make a budget deal, they ought to start with Social Security reform.
A recent estimate of Social Security's outstanding obligations to future retirees is nearly $16 trillion over the next 75 years. It's clear the long-term solvency of Social Security can't be fixed through incremental reforms on the margins - through tax hikes and benefit cuts alone. We've tried that before and are now staring down a demographic black hole that can't be tweaked away.
Personal retirement accounts are a viable solution - and Republicans ought to be working with the White House to make it a reality.
Individual accounts - which would yield returns higher than the 1 percent growth estimated from current "investments" in treasury bonds - would increase revenue, decrease Americans' dependence on the federal government, lower the national debt and restore Social Security to solvency not just for the next 10 years, or even 75 years, but permanently.
Seib rightly acknowledges that one of the greatest challenges to writing the budget is convincing the American public it's time to change some of their most beloved programs. Certainly, reforming our entitlement system is going to take more than good policy prescriptions - it is going to require effective public relations.
The good news is that while the public may be averse to cutting Social Security, they favor reform proposals that offer greater individual control. The Pew Research Center finds 58 percent of the public today favors a proposal allowing for partial privatization of Social Security. In fact, majorities across all age groups, except those 65 and older, favor such a change. And 70 percent of respondents younger than age 30 approve of the idea.
President George W. Bush made a strong push for personal retirement accounts, but despite similar public opinion back in 2004, support for Bush's proposal declined over time. This is where President Obama's oratory skills can come in handy.
At his press conference this morning, Obama said meeting the nation's "fiscal challenge" is going to "require entitlement reform." He called for a "spirit of cooperation between Democrats and Republicans."
Well, in that spirit of cooperation, the GOP ought to push hard for tackling entitlement reform - starting with Social Security. They could offer the winning policy, and Obama could offer the winning speech.
Sabrina L. Schaeffer is managing partner of Evolving Strategies and a senior fellow with the Independent Women's Forum.