Is There Really A Crisis?

Free-market crusader Stephen Moore learned over the years that the quickest way to bring an abrupt end to a conversation was to mention two words: Social Security. He remembers a White House meeting in the mid-1980s at which he raised the idea of overhauling the program as a way to cut the deficit--and a top Reagan Administration official pretended to have suddenly gone deaf. Years later, Moore brought it up as Newt Gingrich and his wrecking crew were drafting the Contract with America, which would be their manifesto for taking over the House. Again, no sale. "It was one thing every Republican said was off the table--even these revolutionary Republicans," Moore recalls. So he was more than a little shocked when he went to Austin in 1999 to meet the Texas Governor, who was putting together a presidential campaign, and George Bush himself brought up Social Security--not just tinkering with the program but making the most radical change of all. "I just want you to know," Bush told Moore, "that I'm really committed to these private investment accounts."

It turns out he meant it. As Bush takes the oath of office and begins his second term this week, he is preparing to bet his presidential legacy on the very issue that Republicans have been doing their best to avoid for decades. Transforming Social Security is Bush's biggest domestic political gamble--audacious even for a President who prides himself on audaciousness--and one that could reshape far more than a single government program. Those who believe in it most deeply say it could redefine politics itself, putting Republican principles in a position to dominate for the next half-century, as Democrats were able to do after F.D.R. created the program that was the signature of his New Deal. Just as Bush believes democracy has the power to transform places like Iraq, so too is he convinced that privatization of Social Security could recharge America's future. The central idea is to take a portion of the tax every worker pays into the Social Security system and put it into a savings account that each individual can decide how to invest. By turning every American into an investor, and a government safety net into a system that rewards judicious risk and individual initiative, Republicans believe they can change how Americans see every question from free trade to capital gains--tax cuts. "If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever," Bush's strategic-initiatives director Peter Wehner wrote in a private memo to Republican allies two weeks ago. "The scope and scale of this endeavor are hard to overestimate."