Striking a deal isn't an absolute impossibility. To prove that a bipartisan agreement is possible if the will is there, Maya MacGuineas, president of the Committee for a Responsible Federal Budget at the New American Foundation think tank, decided to run a little experiment last winter. MacGuineas, a former Social Security adviser to Sen. John McCain's 2000 presidential campaign, brought together Jeffrey Liebman, a former aide to President Clinton, and Andrew Samwick, a former aide to President Bush, to see if they could hash out a reform plan. Some 50 hours later, spread over several months, they had one. The proposal includes beginning to raise the retirement age to 68 starting in 2011, raising the maximum taxable earnings limit to $172,000 by 2017 vs. $94,000 currently, diverting 3 percent of payroll taxes into personal retirement accounts, and reducing spousal benefits for those married to high earners. The plan, already vetted by the Social Security Administration, would return the program to long-term fiscal solvency and create a personal account sweetener to boot. "It's doable," MacGuineas says. "We know what tough choices have to be made. And I think the country is more aware now that something has to happen."
But before anything like that happens in the real knife-fighting world of inside-the-beltway politics, "there is going to have to be an admission among Democrats that highlighting differences on the issue won't play well going into 2008," says Kim Wallace, political analyst at Lehman Brothers, "and a desire not to leave Social Security as an issue for the next president to solve."
Yet if Democrats believe that the next occupant in the White House will most likely be Hillary Clinton, Al Gore, or Barak Obama rather than John McCain, Rudy Giuliani, or Mitt Romney, they have every incentive to stall until 2009. Wallace also thinks that Democrats will be unwilling to work with the White House on the issue as long it continues to push for permanent extension of the 2001 and 2003 tax cuts, currently set to expire at the end of 2010. "Most Democrats think that is not a rational approach," Wallace says. At the same time, he predicts that the next Congress will be the last one able to avoid working on substantial Social Security reform because of the program's obvious and impending fiscal difficulties. Indeed, Social Security surpluses will begin shrinking in 2008 when the first baby boomers become eligible to start drawing checks, just in time for the Iowa caucuses.
Let's hope we get a do-something Congress after the elections, particularly if it's a "do-something-sensible" one at that.