If President George W. Bush presented the 2003 Iraq War as just one campaign in a larger conflict, I suppose he was right. But I don't think we got exactly what he meant.
The State of the Union 2005
That was a very strong speech the president gave last night. He was speaking just after a major foreign-affairs victory, the success of the elections in Iraq, but he had the sense not to milk it. Most important, he did not do what his father did after the Gulf War of 1990-1991, which was to claim an entitlement to future political support based on an accomplishment in the past. That's not how politics works, even in the matter of mere popularity. The question is always "what have you done for me lately?" Better yet, the question is "what can you do for me in the future?" The president answered that question by presenting the Iraq War as just one campaign in a larger conflict. That's good. That's what he was reelected for.
Regarding the first half of the speech, the president made substantive proposals about important subjects. For the most part, he avoided reading a long list of tiny legislative and regulatory recommendations. What the president did propose was not always obviously a good idea, but an executive gains some credit simply by being seen to lead. If people don't follow, that is not necessarily fatal.
The president's ability to deal with failure is going to be the most important aspect of his drive to modify the Social Security system. Again, even that part of the speech was well managed. He did not sound dogmatic, he reached out to the opposition, and he did not try to create the impression of an immediate crisis. He sounded sincere and informed. The problem, of course, is that much of what he was saying was demonstrably nonsense. The Social Security system will not be bankrupt by 2042, or whatever improbable date he used. More important is the fact that his privatization proposal, or ownership program, or nest-egg program, does not do what it purports to do.
The retirement accounts would not be the property of the account holders in any serious sense. Workers paying money into the system will not be able to direct how the money is invested. They will not be able to liquidate their accounts and withdraw the funds. Even at retirement, they will get nothing more than an annuity based on the size of the account. The president proposes to create an "ownership" system in which the owners will own nothing more than a beneficial interest. The only thing that will really be privatized is the risk of low returns.
Is there a way to fix the Social Security system? Sure. Remove the wage cap on the Social Security tax and reduce the rate so that the change is revenue neutral. As the population ages, that will shift the burden from the smaller cohorts of low-earning younger workers to the larger cohorts of high-earning older ones. It's not hard, really.
The worrisome thing abut this controversy is that it could distract the president from the purpose of his presidency, which is almost entirely about foreign policy. George Bush is not going to be driven from office in disgrace like Richard Nixon was, but his party could easily lose the next congressional elections because of his privatization scheme. That would render him far less about to function as a diplomat or a war leader; or for that matter, as a domestic leader in other areas.
I don't particularly expect the Bush Administration to collapse in that fashion. As we have noted, the president has left enough daylight between himself and the specifics of Social Security reform that he can disavow hostile public reaction. There is also this: it is not up to George Bush to decide the great issues of his time in office. We must remember that he came into office in 2001 hoping to de-emphasize foreign affairs so he could concentrate on lowering taxes and pushing a few rather modest social-service initiatives. He is now just trying to return to type. It's not going to work.
Copyright © 2005 by John J. Reilly