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Lessons of the Great "Social Security Reform" Fracas of 2005

Filed under: The Squib Report   Tagged: , , , , , ,

Martin Schneider writes:

In 2005 I attended a debate on the then-hot topic of "Social Security Reform," featuring Josh Marshall of Talking Points Memo, Paul Krugman of The New York Times, and Michael Tanner of the Cato Institute. I was reading a transcript of the debate earlier this evening, and I was struck by an odd parallel or perhaps mirror relationship between that political fight, which the Democrats won, and the fight to pass the Affordable Care Act in 2009-10, which the Democrats won.

The parallel I'm interested in is not that the Democrats won both fights. Rather, the resemblance has to do with what a ruling party does when it pushes an ambitious reform that is not very popular.

A little bit of context. The debate took place on March 15, 2005. After his reelection in 2004, George W. Bush chose to move forward on a favored policy idea of his, Social Security Reform. The Republicans had initially called the project "Social Security Privatization," but after noticing how poorly that term polled, they switched up their terminology and began accusing Democrats of having attempted to demonize them with this term, "privatization." (Something very similar happened later the same year with the term "nuclear option.") The "private accounts" morphed into "personal accounts"—Republicans generally began running away from their own terms.

That spring, Marshall had a huge amount of fun trying to make Republican congresspersons squirm by asking them whether they supported Bush's plan on Social Security (whatever name you gave it). Over those weeks, it became harder and harder to get any Republican congressperson to state on the record that they supported privatizing Social Security. The plan fizzled out, in the face of Democratic unity in favor of preserving the current system for the time being.

(I mentioned that Marshall got some enjoyment by embarrassing and neutralizing these Republicans. That is a massive understatement; I think when Marshall looks back on his illustrious career of Internet muckraking, this episode, in which he tarred this or that Republican a "bamboozler," will be on the short list of the most satisfying moments of all.)

In the debate, Marshall was asked to describe the political aspect of the battle over Social Security reform (as opposed to the substantive side). In his opening remarks, Marshall said this:

The second thing is, and Democrats did this very quickly, is their party unity took away all the political cover. It was really going to be up to Republicans to make privatization an entirely Republican enterprise, and they were too afraid to do it because a lot of those representatives could see how their constituents were going to react and so forth.

Re-reading the transcript tonight, it was this passage that reminded me so much of the fight to pass the ACA (what used to be known as "the health reform bill"). That phrase, "an entirely Republican enterprise".... that's the position the Democrats were in all of last year, wasn't it? You bet it was.

A person might conclude from this that Democrats and Republicans both obstruct, but that the Democrats happened to be better at it (aided by a larger minority than the Republicans now have). But I think there's something more fundamental going on that tells you a great deal about the two parties and what they stand for.

Consider these two statements:

In 2005 the Republicans, in control of the White House and Congress, proposed a bold new reform that would affect a key area of American life, and it didn't poll very well, and as soon as the unpopularity of the proposal was made apparent, the Republicans dropped the policy when they realized that it would be associated solely with Republicans.

In 2009-10 the Democrats, in control of the White House and Congress, proposed a bold new reform that would affect a key area of American life, and it didn't poll very well, and as soon as the unpopularity of the proposal was made apparent, the Democrats, with a great deal of difficulty, passed the policy even though they realized that it would be associated solely with Democrats.

To put it more simply, both parties were given an opportunity to foist their favored policies on the nation in a unilateral way. The Republicans did not want to be associated with their own stated policies, but the Democrats were willing to be associated with their own stated policies.

I have a few conclusions about this, which may reflect my political bias.

Conclusion 1: By and large, Republican positions are minority positions, and Democratic positions are majority positions. Or to put it another way, the Bush administration and the Republican Congress of 2002-2007 found it difficult to implement their ideas because they were favored by such a small portion of the electorate. The Democrats of 2010 do not have this problem; their ideas held by a great many people, broadly speaking.

Conclusion 2: Democrats are sincere about their policy ideas; Republicans are not. I don't want to overstate this too much, but there is more than a kernel of truth to it. Republican ideas ideas sound appealing and have some populist appeal but would have pernicious effects. Republicans express generalized distaste for the government services, but a lot of that is just rhetoric, and when push comes to shove, they are not very interested in decreasing those services. Contrariwise, the Democrats are more willing to argue for the benefits of social services and intelligent deployment of government generally, and when the going gets tough, it turns out that they actually do believe that.

And lastly,

Conclusion 3: Democratic ideas are good ideas; Republican ideas are bad ideas. Again, don't want to take this too far. But the fight in 2005 was between a group that wanted to kill or at least diminish Social Security in favor of retirement accounts tied to the stock market in some broad way. Surely, the stock market crash of 2008 reveals this to have been a terrible idea.

Similarly, the fight of 2009-10 was between a group that wanted to provide uninsured people with health care and a group that was quite happy to keep them uninsured. Democratic ideas are easier to defend not only because they are popular but also because they are genuinely good ideas.

Thus endeth the sermon.


Hi Martin,

Doesn’t your first conclusion contradict your premise? Health care reform was actually very popular (at least in principle; there was lots of disagreement about what specific form it should take, and people grew increasingly frustrated with the process - but not, I think, with the basic principle that the system needs to be changed). It seems to me that the main reason there wasn’t more support than there was (toward the end of the process) is because the democrats had handled it so ineptly, both through preemptive concessions (eg to pharma) and by failing to articulate a clear plan / set of goals.

As for obstructing, I don’t think it is necessarily bad. Obstructing a bad policy that nobody wants and that will cause harm is a good thing. But in the case of hcr, the republicans were obstructing widely-desired changes to an unsustainable system without offering any alternatives. I think it is a different ball game.

Excellent points, Amy. I certainly agree that health care reform (that is, some major steps in the direction of universal health care) is far more popular than gutting Social Security in favor of placing our retirement futures in the care of Wall Street. And you’re right that there’s a clear surface contradiction in my setup that I hadn’t spotted. Actually, we probably disagree on hardly anything.

I was going to say that there’s a difference between something that polls well and something that’s popular, but I think that too misses the point. Let’s start with my Conclusion 3, Democrats have good ideas but Republicans have bad ideas. When that is the case, the party with the bad ideas will spend a lot of its time dressing up its bad ideas to look at lot like the good ideas that the other party is selling, as an electoral strategy. The evidence for this is the entirety of George W. Bush’s 2000 election campaign. Bush was a “compassionate conservative” who ran on his record of working with Democrats and reforming education in Texas—even well into his tenure, many of his staunchest supporters told pollsters that Bush was in favor of lots of reasonable Democratic ideas like laws to decrease carbon emissions and the premise that the United States should be part of the International Criminal Court, neither of which policy Bush ever supported for a nanosecond. But he made sure the general electorate didn’t know that.

Even beyond stuff like that, when you’ve got bad ideas you’ll do your damndest to dress them up to look pretty, i.e. pull a bait and switch. That creates a situation where accurate reporting about your policies will decrease the popularity of your policies.

The Democrats don’t have that problem. Accurate reporting will always help the Democrats, but they are prone to being demagogued because it’s difficult to summarize some of the ideas succinctly. Since the Democrats generally are trying to pass complicated legislation that solves complex problems, they can’t rely on an obfuscation strategy, and it interferes with their messaging strategy because different legislators differ over important nuances and are trying to send signals in the press to other legislators about how to proceed. I think this is part of what you mean when you say “inept.” The HCR process was distressing, no denying that, but I don’t think the problem was fundamentally that the Democrats are inept; the problem is that the Democrats are adults, and the media climate doesn’t reward that behavior at the moment. Given the circumstances, I think the Democrats actually did a pretty good job, even though it was immensely frustrating.

So to return to your original point, yes, perhaps the Democrats weren’t all that courageous in bucking the shaky polls last January. Indeed, I was always of the opinion that all the electoral pain of passing HCR would happen before passage, i.e. it would only get more popular over time. I hope that’s true. It’s still the case that proceeding with passage after Scott Brown’s special election took considerable courage, courage that would never have materialized if the Democrats didn’t believe, deep down, that the basic policies were very good and would help a great many people.

Well, perhaps it’s not so much that they are inept as that they are compromised - ie, they are beholden to many of the entrenched interests that oppose reform, so they have to walk a very fine line between that and public opinion. But you’re right that “the democrats” are not a monolith, and that there is plenty of disagreement among them, which makes it hard to articulate a single message. (And the complexity of the situation makes sound bites difficult, as you point out as well.) So I mostly agree with you but I still think they could have done a better job of speaking to the public, even given all those constraints. But at the end of the day i really don’t know how much to attribute to externalities and how much to bad decisions. And I think you’re right that policies tend to become more popular after they’re passed (eg, medicare, social security). So in that sense they were right (at least from a strategic standpoint) to insist on passing something, however flawed.

Oh and by the way: happy birthday!!

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