Washington
President Bush is wrapping up the initial phase of his campaign to transform Social Security from a government-guaranteed insurance program into some form of hybrid public-private investment plan.
Pollsters here will tell you that with each presidential trip through the heartland, more people become aware of Social Security’s long-term funding problems and expect Congress to act and keep the program solvent.
But while Bush has raised awareness, he has not proposed, much less sold, a solution.
Any honest fix will be painful, requiring benefit cuts, tax hikes or both. And, the stock market’s recent slump has focused renewed attention on the risks and limits of private investing.
The backroom political skirmishing over how to treat women under Social Security offers an illustrative glimpse of the arduous political road that the president still faces.
When Social Security was enacted in the 1930s, seven out of 10 married women stayed home and kept house. And so a “spousal benefit” was created, granting a wife 50 percent of what her husband received, even if she never paid into the system.
Today, the percentages are reversed: Roughly seven out of 10 married women work outside the home. Women marry later, or not at all. The divorce rate has doubled. Moms have fewer children and return to work sooner. More women run their own businesses.
Yet, Social Security has not kept up with these changes, and a compelling argument can be made that the system is now unfair to single and divorced women.
Social Security “gives an additional benefit to spouses just for being spouses, but no such benefit to single and many divorced parents, including those who raise more children, work more, and pay more taxes,” write economic analysts Eugene Steuerle and Melissa Favreault, in a paper for the Tax Policy Center here. Any plan to reform the system should “stop the obvious disparities in the way it treats single heads of households and those divorced.”
There are other anachronistic flaws in the benefit structure, says Leanne Abdnor, executive director of Boulder- based Women for a Social Security Choice.
Spouses whose paychecks are roughly equal receive less in benefits when they retire than couples in which one spouse makes much more money than the other.
A widow who spends a lifetime working can receive fewer benefits than a widow who worked a few years or stayed home.
Mothers who divorce after being married for less than a decade – even those whose marriage survives nine years and 11 months – get far fewer benefits than divorced women whose marriages exceeded an arbitrary span of 10 years. The average duration of American marriages that end in divorce, Abdnor notes, is about eight years.
It is a tribute to GOP intellectual honesty (or perhaps their desire to sell the idea of personal retirement accounts to working gals) that GOP leaders are considering ways to address such inequities in their redesign of Social Security.
Yet, House Ways and Means Committee chairman Bill Thom as, R-Calif., has suggested that the U.S. may want to “gender adjust” Social Security, and Abdnor, a member of the president’s Social Security commission, has briefed the House Republican Conference and the libertarian Cato Institute this year on how private accounts might help working women.
But no good deed goes unpunished. For the crime of considering that a 70-year-old program may need updating in the wake of a demographic revolution, the Republicans have been savaged by liberal women’s groups.
“How dare these Republicans claim women are getting ‘extra’ benefits, when in reality they’ve sacrificed their own economic well-being by caring for their families?” asked Kim Gandy, president of the National Organization for Women, in defense of the spousal benefit. “The hypocrisy of the party that supposedly stands for family values is stunning.”
It is this brand of scorched- earth politics that leads some of Washington’s wiser wise guys to conclude that Bush is fighting for a losing cause.
“The White House should be looking for an exit strategy,” says former Sen. John Breaux, a centrist Democrat from Louisiana who was appointed by Bush to head a special commission on tax reform this year. “They’ve made a great effort; they tried, but it hasn’t happened, and I don’t think it’s going to happen.”
John Aloysius Farrell’s column appears each Sunday. Contact him at jfarrell@denverpost.com or 202-662-8990.
