Are Dems and the GOP Speaking the Same Language?

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Congressional Democrats made it clear during President Bush's State of the Union address Wednesday that they are not going to budge when it comes to social security. They responded to Bush's sales pitch for reforming the system by yelling "No" at his predictions of imminent bankruptcy. The next day, they began their counteroffensive, making a pilgrimage the F.D.R. memorial, unveiling a website called "State of Delusion" and sending a letter from 43 senators to the President rejecting his plan. For his part, Bush began a two-day roadtrip in support of his plan, visiting five states that backed him in November and are represented by Democratic Senators.

Both sides maintain they would like to find common ground. But that may be impossible. The trouble with this debate is that the parties see social security in fundamentally different ways.

Democrats view social security the same way Roosevelt did, as a form of insurance, a safety net for senior citizens. When FDR created the plan, the country was in the middle of a Great Depression. Seniors were living in extreme poverty and many people feared they would never have a secure retirement. Social security was a guarantee that no matter what happened to your finances, the government would be there to back you up. You couldn't live in wealth and splendor on a social security check, but you could live with dignity.

Many conservatives — and a good number of Republicans — believe that social security is welfare for old people. It forces current workers to pay taxes to finance handouts to the elderly. They argue that the program makes the elderly unnecessarily dependent on the government and lets younger workers think they don't need to invest and save. Conservatives believe that the government's job is not to hand out monthly support money to senior citizens, but to give citizens a helping hand to invest money and build their own personal nest egg for retirement.

Conservatives — and the President — believe that personal retirement accounts will give workers a better return than Social Security and give them a greater stake in the economy, encouraging more savings and investment. Other facets of Bush's proposal to create an Ownership Society are based on the same arguments — for example, the government should be helping people build health savings accounts so they can save money to pay for medical needs. Some conservatives even argue that such accounts are better than health insurance because when people have to pay for their own health care costs, they are more selective about what treatment they seek and force the health care industry to be more competitive.

Polls consistently show that most Americans agree with the President when he says Social Security needs help, but they are not convinced that private accounts are the answer. Bush's plan is heading for trouble because his sales pitch doesn't seem to satisfy either the Democratic or Republican arguments. He argued in the State of the Union speech that Social Security is on the road to certain bankruptcy and that private accounts are the best way to save it. But his advisers admitted in briefings only hours before that private accounts will not solve the system's fiscal problems; in fact, they'll exacerbate them by diverting money that would go to today's retirees and putting it in investment accounts for tomorrow's. And since the President has ruled out tax increases, benefit cuts or heavy borrowing are the only ways to fix the looming shortfall. The President refused to propose any specifics.

On the other side of the ideological equation, the President argues that personal accounts will help create his Ownership Society. Yet the accounts are not quite what conservatives envisioned. Accountholders would only be able to invest a third of their money in a small handful of portfolio options and at retirement, the money would buy an annuity that gives them a monthly check to supplement their lower Social Security payment. It seems like a lot of work for little gain, and actuaries predict the rate of return on the investment accounts will be only a few percentage points higher than Social Security's return.

In the end, Bush's muddy option doesn't really represent the Democrats' or Republicans' vision of what Social Security should be. Does that make it a compromise or a plan that will satisfy no one?