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Public Cool to Bush’s Social Security Plan
Ruy Teixeira, The Century Foundation, 1/19/2005

President Bush's second term officially begins with his inauguration, but he has already signaled his intent to push his Social Security privatization plan through Congress during his second term—in fact, as soon as possible. That's what he wants. What the public wants, however, is far different as revealed by four recent polls taken on the eve of his second inauguration.

The first poll to consider is the new Pew Research Center poll, their annual assessment of the public's policy priorities. That poll finds that, while 49 percent say the Social Security system needs major changes or to be completely rebuilt, far more say the health care system has problems of this magnitude (71 percent) or that the educational system does (62 percent). And, while the poll finds support (54 percent to 30 percent) for the very general idea of having private investment accounts within Social Security (the typical finding when no tradeoffs or costs are mentioned), the poll also finds overwhelming support for the priority of "keeping Social Security as a program with a guaranteed monthly benefit based on a person's earnings during their working life" (65 percent) rather than "letting younger workers decide for themselves how some of their own contributions to Social Security are invested, which would cause their future benefits to be higher or lower depending on how well their investments perform" (29 percent).

The second poll is the new Time/SRBI poll, which focuses particularly on the Social Security issue. To begin with, the poll finds that public divided both on whether there truly is a Social Security crisis (45 percent say there is; 44 percent say that's just a scare tactic to help Bush push through his plan) and on whether they favor (44 percent) or oppose (47 percent) the general idea of allowing people to invest part of their Social Security payroll tax in stocks and bonds.

Note that the latter finding was before respondents were informed of any possible costs of the plan. Opposition moved to 48 percent to 41 percent if Bush's plan included a drop in "guaranteed money from Social Security". And when informed that Bush's plan would include government borrowing of $1-2 billion over ten years, in addition to the private accounts and reduction in guaranteed benefit, opposition to his plan soared to 69 percent to 21 percent.

In perhaps the most intriguing result of the survey, by a healthy twenty-three points (56 percent to 33 percent), people believe they personally would do better sticking with the current system "which pays benefits regardless of the performance of stocks and bonds" rather than "investing part of your Social Security payroll tax in stocks and bonds."

The poll also finds the public favors a series of alternative ways to fix the Social Security system's problem, some by wide margins. By 48 percent to 41 percent, they favor raising the cap on income that is eligible for Social Security taxation; by 58 percent to 38 percent, they favor reducing Social Security benefits for wealthy people; by 69 percent to 28 percent, they favor providing more incentives for people to work beyond the ages of sixty-two and sixty-five; and by a very impressive 73 percent to 19 percent margin, they favor allowing people to invest more in tax-deferred retirement accounts outside of Social Security.

The latter result strongly suggests that Congressional Democrats could strengthen their hands against Bush's Social Security privatization push by focusing attention on a plan to provide private accounts outside of Social Security, such as the one advocated by Gene Sperling of the Center for American Progress or alternatives previously proposed by economists such as Henry Aaron, Alicia Munnell, or the late Robert Eisner.

The new Washington Post/ABC News poll gives Bush a very low 38 percent approval rating on Social Security, tied for the lowest he has ever received on this issue in this poll. The poll also finds that the public trusts congressional Democrats (50 percent) more than Bush (37 percent) to handle the issue. And young people (age eighteen to thirty), in particular, have little confidence in Bush on Social Security: just 33 percent approve of the way he is handling the issue, compared to 60 percent who disapprove, and by 59 percent to 32 percent, they say that they trust congressional Democrats more than Bush to handle the issue.

And these are the voters who are going to power the Republican drive to transform Social Security? Seems hard to believe based on these data.

On the specific plan Bush is putting forward to deal with Social Security, the Washington Post/ABC poll reports markedly more positive results for that plan than almost all recent polls, including the Pew and Time polls summarized above. A question that mentions a change in the guaranteed benefit returns a close split (48 percent opposed/47 percent in favor) and a question than mentions this change in guaranteed benefit along with "a stock market option for Social Security contributions" returns a 54 percent to 41 percent majority in support.

How can this be-how did the Washington Post/ABC poll come up results so radically different from other polls?

Simple. It's all in the question wording. The change in the guaranteed benefit that is mentioned in the Washington Post/ABC questions is not described as a cut in the guaranteed benefit but rather as "a reduction in the rate of growth in Social Security benefits for future retirees"-a question wording that no doubt elicited broad smiles down at the White House and in the offices of congressional Republican leaders.

And I'm sure it's true that if the massive cut in guaranteed benefits proposed by Bush is uniformly referred to simply as a reduction in the rate of growth of benefits, Bush's plan could have pretty smooth sailing. But of course that's not where the debate is going to take place and it's rather odd that the Washington Post/ABC poll chose to use the locution favored in RNC talking points, rather than the straightforward wording favored by other pollsters.

So these particular results should be treated very skeptically. In particular, no one should suppose that congressional Democrats' criticism of Bush's proposed cut in guaranteed benefits is likely to be ineffective, based on the Washington Post/ABC findings. Noam Scheiber is all over this one and his assessment is worth quoting at length:

According to the Post, the response [to the proposed change in guaranteed benefits] was basically a wash: 48 percent opposed the idea, 47 percent supported it. So does that mean it would be hard for Democrats to defeat privatization by emphasizing benefit cuts?

Noooooo!!!!!!

What would be a wash is a debate in which one side argues: "To help keep the Social Security system funded, we want to reduce the rate of growth in guaranteed benefits for future retirees by up to one and a half percent a year." And the other side argues: "We oppose reducing the rate of growth in guaranteed benefits for future retirees by up to one and a half percent a year, even though it would help keep the Social Security system funded and would, truth be told, be the responsible thing to do."

What would not be a wash is a debate in which one side argues: "To help keep the Social Security system funded, we want to reduce the rate of growth in guaranteed benefits for future retirees by up to one and a half percent a year." And the other side argues: "Bush will SLASH your Social Security benefits." Or, even better, "Bush will SLASH your Social Security benefits by $4 TRILLION," which is the kind of cut we're talking about.

Note to congressional Democrats: If there's something in here that doesn't make sense, please see "Medicare, slowing growth of, 1995," in your handbook.

Exactly.

The final poll to be considered here is the new Annenberg survey. That poll finds startlingly lopsided 86 percent to 11 percent opposition to a Social Security funding proposal worded as "[w]hen current workers retire, giving them lower benefits than what they are now promised". Note the huge difference with the Washington Post/ABC finding, though both questions are referring to the same proposal.

The Annenberg survey also finds that only 18 percent of the public favors Bush's plan to both reduce "promised benefits and current taxes by allowing workers to invest some of their Social Security contributions in the stock market" once it is mentioned that such a plan would entail borrowing as much as $2 trillion to cover benefits for people who have paid into the current system.

And on Bush's alleged election mandate to transform Social Security, here is what the public has to say: just 23 percent think his election victory means the American people support his ideas about changing Social Security, while 65 percent do not. And of those who said he did not have such support from the American people as a whole, only 19 percent believe he even has such support from the people who voted for him. Finally, by 50 percent to 32 percent, the public says they personally do not support his ideas about Social Security.

No mandate. Little support. Less enthusiasm. Maybe when House Ways and Means Committee Chairman Bill Thomas (R-Calif.) called President Bush's plan "a dead horse", he knew what he was talking about.

Ruy Teixeira is a senior fellow at The Century Foundation and the Center for American Progress.



 



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