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Personal Accounts Will Happen

This column from the National Review Online was written by Robert Moran.
There is a natural level of skepticism that surrounds any big legislative idea. Much of this is founded upon the bedrock of experience and the understanding that it is far easier to stop legislation than it is to finish it. So, it should come as no surprise that a number of people are saying that introducing personal Social Security accounts is not possible in this Congress. After surveying the landscape, I think they're wrong. In fact, I believe personal accounts, if not wholesale reform of the Social Security system, will be achieved in this Congress and quicker than most think.

There are six reasons for this:

Reason #1: America has changed. Americans are no longer afraid of stock and bonds. They are invested in them. Conservatives understand that this is a transformational time, economically and politically. The combination of employers breaking their social contract with American workers in the 80s and 90s and the popularity of individual investing has made Americans, especially those of a younger generation, see themselves as autonomous economic entities -- free agents, in other words.

These free agents and the investor class are well educated about stocks, bonds, and mutual funds. They are not apt to believe claims that personal accounts are tantamount to "gambling."

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The Democrats think they can fight this battle on the public-opinion terrain of the early 1980s. They are mistaken. Most surveys on the topic have shown majority support for personal accounts. In fact, a recent Washington Post survey conducted shows 55 percent support for personal accounts. Americans, in other words, are already comfortable with the general idea.

Reason #2: The president's message on this issue is in line with the central organizing principle of our society -- choice. Republicans have the upper hand on this issue, because they are "pro-choice" in the sense that they want younger workers to have a choice in how they save for retirement. But it's only a choice. No one will force younger workers into a retirement scheme they don't want. They'll be given options.

40 percent of private-account supporters, in a recent CATO survey on the subject, said their primary reason for supporting this policy is that it's their money and they should have a choice in how to save and invest it. Advocates of private accounts will be most successful when they demand that their opponents explain to 20-and 30-something workers why they shouldn't have a choice and why they can't be trusted with their own money. To paraphrase a tired liberal slogan, "my money, my choice."

On the other side, the Democrats will mount the "anti-choice" battle and, when not reprising their decades-old rhetoric on the issue, insult younger workers by telling them that they can't be trusted to make good choices for their families.

And then there are the political dynamics...

Reason #3: The president will mobilize his base on this idea, and the vast majority of Republicans in the House and Senate will vote for it out of fear they could be defeated in a primary if they vote nay. In many ways, the situation will mirror the impeachment debate of the late 1990s. Spineless Republican legislators will approach the issue cautiously, but as their primary voting base takes a firm position, they will cave. Why? Because these legislators will understand that in their gerrymandered districts the biggest threat to their careers isn't one bold vote used against them in the general election, but one errant vote used against them in the primary.

The media will again underestimate the campaign the president has launched on personal accounts. They will measure his campaign only by how many Democratic voters he can persuade and not by the far more important metric of how many base voters he will excite.

This president, loved as much as Reagan by the grassroots, will make voting against personal accounts as inconceivable on the Republican side as voting for tax increases. The CATO Institute has already found in its survey research that 74 percent of Republicans favor private accounts. Bush's State of the Union speech, his campaigning on this issue and talk radio will only cement this belief among Republicans. I expect this number will eventually climb to 90 percent among Republicans, inflating national support levels.

This rallying process is already beginning. As a result of their White Sulfur Springs retreat last weekend, Republican members of Congress are already coming Bush's way. And, the president seems determined to take his message on the road, with a special emphasis on vulnerable 2006 Senate Democrats.

Reason #4: Cautious Republican legislators will eventually come to their senses and realize that the downside risk of support for personal accounts is minimal. The vast majority will, upon reflection, realize that they are in safe seats. And those that are not in safe seats will have already walked themselves through Reason #3.

Reason #5: When moderate, red-state Democrats grasp that the GOP is united on this issue and that it is likely to pass, they will choose self-preservation over ideological purity and cave. Why, they will ask, should they get wiped out in 2006 over a vote their party is going to lose anyway? When these Democrats see that the GOP is hanging together, they'll plead with their leadership not to obstruct a vote and give their opponents a 2006 turnout tool.

Reason #6: Never underestimate the political allure of "being for what's gonna happen." Some ambitious Democrats will read the handwriting on the wall and decide that it is far better for their political careers to be maverick Democrats on the side of the investor class than doctrinaire liberals opposed to personal accounts. The calculus is simple. Democrats with their eyes on higher office will know that a future thatallows personal Social Security accounts is a future where roughly 30 percent to 40 percent of voters have personal Social Security accounts. They won't want to see their 2008, 2012, or 2016 political ambitions destroyed by attack ads criticizing them for opposing accounts that will be commonplace in the future. In fact, they will reason that the act of defiance they take by voting for personal accounts in 2004 may, like a vote for Gulf War I, be a legitimizing vote in a far off presidential election.

Summary: Skeptics are right to point out the difficulties of passing major legislation. But, the man and the moment appear to be aligned for personal accounts to become a reality. The president has a number of important factors in his favor and he'll leverage each of them to maximum benefit.

Robert Moran is a vice president at Republican polling firm Fabrizio, McLaughlin & Associates. He is an NRO contributor.

By Robert Moran Reprinted with permission from National Review Online

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