... And Here's The Solution

In Washington last week, the Democrats rehearsed a new line: President Bush is approaching Social Security reform the same way he entered Iraq--precipitously, declaring a crisis where none exists, creating a solution that promises to be disastrous. They were also, privately, mystified. Why was George W. Bush choosing to waste his honeymoon political capital on this particular can of worms? The polls indicate no great public clamor to change the system (and the Democrats were right about the absence of a crisis--there is a Social Security problem; there is a Medicare crisis). Indeed, there were rumblings of discontent among congressional Republicans, some of whom still aspire to fiscal responsibility and fear that the President's proposal, when it comes, will break the bank. Others are afraid the Democrats' ancient entitlement demagoguery--the Republicans want to steal your retirement!--still has sting. Why on earth didn't the President lead with tax reform, which is always fun, incomprehensible to the public and inevitably profitable for the G.O.P.'s traditional Gucci constituencies?

"Ideology," said Senator Ted Kennedy flatly. I suppose that's true, but in a far less pejorative way than Kennedy supposes--and with a dash of legacy trolling and party building built in. The President believes in his "opportunity" society, believes a retirement system that allows individuals to make their own investment decisions is better than one that doesn't. He also believes that even if young people aren't quite sure about personal investment accounts now--in last week's TIME poll, those under 34 had mixed feelings about the idea--they'll love them in years to come. Karl Rove's dream is that this generation will eventually feel the same allegiance to Bush and the Republican Party that their grandparents felt for F.D.R. and the Democrats. And beyond the politics and ideology, there is the President's style: Bush loves bold. He sneers at small, is annoyed by niggling. If you're going to reform Social Security, why not Roto-Rooter it? In this particular case, he has a point.

Private investment accounts are a terrific idea, if you can afford them and they are carefully regulated. They will provide a higher rate of return than the current system, if the economy doesn't tank (in which case the current system may not make it either). And there are social intangibles that come with ownership. When I visited Chile to look at its privatized Social Security system 10 years ago, I met with formerly radical factory workers who proudly brandished their retirement-fund statements and told me they were now paying as much attention to the business page as the sports page in the newspaper. It seemed ownership had invigorated the country, made a frail democracy more stable. By most reports, the Chilean system continues to thrive.