President #11: George W. Bush (2001-2009)

How serious of an issue did you consider increasing Social Security costs? What role did the large deficits you experienced play in your reform efforts?

Throughout my presidency, my administration struggled with the problem of the ever-increasing costs of entitlements including Social Security. In 2002, I assumed my post with the promise of taking an insolvent Social Security system and making it financially stable, partially through the creation of personal retirement accounts for younger workers.

I knew that, without changes to Social Security in the immediate future, the American public would have to face massive increases in tax, decreases in benefits, or sustained deficits. This was due to the aging population taking benefits out at a higher rate than the workforce was contributing. I also knew that Social Security was a pillar of American society that represented the passing of trust from one generation to the next;[1] our “commitment of conscience.”[2] It was our duty to protect its sanctity through thoughtful and meaningful reform. [3] Balancing these two competing demands with a divided Congress proved to be extremely difficult, however.

I had witnessed the Amendments of 1977, of 1980, of 1983, of 1994. I knew these fixes that we thought would be sustainable, turned out to be short-term solutions. I set out to permanently fix Social Security, not craft short-term fixes like my predecessors.[4] My promises from the beginning were making sure that no American receiving Social Security benefits or soon to receive them would be impacted by potential reform. For the younger generation, I said we have a significant problem and we need to fix the system and we would do that by allowing them to set aside a portion of their payroll taxes, gradually increasing up to 4%, for a personal savings account.[5] This move would privatize Social Security and allow them to invest in a combination of stocks and bonds that yields a much higher rate than the 2 to 3% gained yearly by Social Security.[6] They could diversify these portfolios and have the government maintain specific controls on them to avoid too much risk, and thus be able to create a “nest egg” that the government would not be able to take away. I also knew that we needed to increase retirement savings outside of Social Security, so I explained how we would strengthen employer pension plans and incentivize IRA savings.[7]

I drew the line at increasing payroll taxes, reducing benefits for current or future retirees, and swift changes that did not allow people adequate time to adjust; these were options I was not willing to address.[8] We wanted to portray Social Security as what it really is, money for the people, not “some kind of federal program.”[9]

My recommendations came as part of recommendations by a bipartisan commission to modernize Social Security and yet Congress was unwilling to pass my proposed amendments in 2005.[10] Time ticked away on the issue of Social Security and despite my best efforts, I was unable to enact meaningful legislation to increase the solvency of the Social Security system. Like those before me, I underestimated the difficulties in drafting solutions to long-term problems in line with the short-term, election-minded politics of Congress. In addition, privatization was seen as too risky for Social Security investment by many of the political elite.

After my failures in 2005, I continually encouraged Congress to establish bipartisan reforms, but the issue of Social Security kept getting pushed back on the agenda. Each year we fail to act, the situation gets worse. I came into my presidency believing I could touch the “third rail of American politics,” and though my administration tried, we were not able to establish the bipartisan consensus reached in 1983 by President Reagan, and thus we were unable to reform the system.[11]

Editor's Note

It was difficult for President Bush to craft meaningful legislation across party lines when he was such a ideologically polarizing figure, welcoming love from the political right and disdain from the left. This was a main contributing factor to the failure of his 2005 legislation and subsequent failures to produce meaningful recommendations via truly bipartisan commissions. He was also overconfident because of the success of Reagan's 1983 legislation.

Bush also suffered from a lack of urgency; despite his rhetoric, he couldn't force Social Security onto the short or long term agenda and more salient, partisan issues took precedence. Thus, despite his respectful treatment of Social Security, focusing much more on increasing benefits than taxes, he was unable to produce meaningful reform.

Finally, Bush's proposals suffered because they earned the distrust of politicans and the American public. Privatizing a beloved governmental institution in the midst of sever economic fluctuations proved to great a feat in a climate that had come to embrace the "third rail" of American politics, an entity beyond significant reform.

[1] George Bush, 2005 State of the Union Address. Retrieved from http://www.msnbc.com/id/6902913/
[2] George Bush, 2007 State of the Union Address. Retrieved from http://wwwmsnbc.com/id/16672456/ns/politics-2007_state_of_the_union/t/full-text-state-union-speech/
[3] George Bush, 2005 State of the Union
[4] George Bush, 2007 State of the Union
[5] George Bush, 2005 State of the Union
[6] Ibid
[7] Ibid
[8] Ibid
[9] George Bush, Speech in St. Charles, MO. Nov 2, 2000. George W. Bush on Social Security. On The Issues. Retrieved from http://www.issues2000.org/2004/George_W_Bush_Social_Security.htm
[10] George Bush. 2006 State of the Union Address. Retrieved from http://articles.cnn.com/2006-01-31/politics/sotu.transcript_1_union-speech-misguided-idealism-president-bush-s-state?_s=PM:POLITICS
[11] George Bush, Speech to Republican National Convention. Aug 3, 2000. George W. Bush on Social Security. On The Issues. Retrieved from http://www.issues2000.org/2004/George_W_Bush_Social_Security.htm