ON THE BASIS OF WHAT President Clinton has revealed so far, his second term won’t add much to his reputation. His top priority is a balanced budget, a goal he embraced reluctantly and only because Republicans insisted. Second, he’s pushing a costly education package. But even if the whole thing passes, it won’t have more than a marginal impact on the public schools. Still, Clinton broods about his place in history. In Behind the Oval Office, political adviser Dick Morris tells of a conversation last August with Clinton about his rank in the hierarchy of presidential greatness. ” Borderline third tier,” Morris informed him. George Stephanopoulos, the just- departed White House aide, says Clinton often ponders “what his special role is.” Now, he may have found the answer. If all goes well in the early months of his second term, he’ll try to become the president who saved Social Security, from both bankruptcy and Republican privatizers.
For the moment, Clinton is not letting on. In his State of the Union address on February 4, he dismissed the issue with a fleeting reference to favoring “a bipartisan process to preserve Social Security and reform Medicare for the long run.” A week earlier at a White House press conference, he was even less forthright. He said he favors “modest changes” that would prolong the solvency of Social Security “a little bit.” Asked about the recent report of his administration’s Advisory Council on Social Security, he declined to discuss any of its three competing recommendations for partial privatization, though he likes one of them.
Why can’t Clinton talk candidly about his strategy for saving Social Security? That would be counterproductive, he thinks. Yet Clinton talks about it privately all the time. During last year’s campaign, Morris says he had to warn the president frequently not to slip and talk about Social Security in public. “He worries about the Social Security issue,” says Morris. “He’s eager to deal with it.” But if he tried to now, that might jeopardize negotiations with Republicans over a balanced budget. “If you go too quickly, you poison the well on the current budget,” says Stephanopoulos. Adds Mike McCurry, the White House press secretary, “the problem with bold strokes is they could quickly serve as lightning rods for opposition.”
That touches on Clinton’s other reason for holding back: political survival. Just as Republicans figure any move on their part to reform Social Security would prompt demagogic Democratic attacks, Clinton fears a preemptive move by him would trigger harsh GOP criticism. It probably would. So he prefers to wait until he’s been reassured by what his aides call “confidence-building measures.” The most important of these would be a swift budget deal with Republicans. Even better would be a budget accord that includes a downward adjustment in the consumer price index and thus in the annual cost-of-living hikes in programs like Social Security. Though he has talked about a CPI change with Federal Reserve chairman Alan Greenspan, Clinton won’t propose it. That’s too risky. Instead, he hopes it will emerge in budget talks with Republicans. If so, the president’s confidence about moving to a big Social Security fix will be high.
The next step is the creation of a bipartisan commission. According to Morris, the announcement of the commission will stress Medicare, but the real focus will be Social Security. The idea is that Clinton and Senate majority leader Trent Lott will stack the panel with their allies, then quietly pressure them to adopt a strong, unanimous recommendation. What might that be? First, the COLA would be reduced. Second, the eligibility age would be raised, then indexed to rise with increases in life expectancy. Finally, a chunk of the money collected to pay Social Security benefits — maybe 40 percent of it — would be invested in stocks or bonds. This revenue-raising scheme was recommended by the faction on the Advisory Council led by Robert Ball, a former commissioner of Social Security.
“My guess is the president will vehemently oppose any privatization attempt, ” says Stephanopoulos. In fact, investing Social Security funds in private markets is privatization. It just doesn’t include the creation of Social Security retirement accounts in which individuals would invest their payroll taxes in the market. Clinton is bound to oppose that, says Stephanopoulos, ” because it undermines the whole idea of universal social insurance.” McCurry says it’s also off-limits since it clashes with the New Deal legacy of the Democratic party. Of course, so did welfare reform, yet Clinton allowed the welfare entitlement to die.
Can Clinton pull off the big fix? It’s possible, but note the lack of out- front leadership by the president. Clinton wants to achieve reform by subterfuge. Maybe that’s the only way it can happen — through the back door. However, the whole process strikes me as Clintonesque, which means overly clever. Are Lott and other Republicans so complaisant they’ll go along without pressing vigorously for Social Security IRAs? And won’t liberals demand means testing for Social Security benefits or a hike in the employer’s side of the payroll tax? Saving Social Security on Clinton’s own terms won’t be easy.
But at least Clinton recognizes it is necessary. That, by itself, is a huge concession that many liberals refuse to make. Saving Social Security without boosting the payroll tax or cutting off wealthier beneficiaries is a conservative idea. There are liberal ideas Clinton might be tempted to pursue in a bid to make history: national health care (again), an ambitious stab at narrowing income inequality through tax reform, a Reichian effort to change corporate culture. Give him credit for not biting at those. As it now stands, the history-making accomplishment he craves is Social Security reform. Should he succeed, “it could do transformational things for him and the Democratic party,” says Vin Weber, the Republican strategist. “It could make all that New Democrat b.s. real.” Indeed.
Executive editor Fred Barnes is a regular political commentator on “CBS This Morning.
