Has the collapse of Enron finally pushed Social Security
"reform" off the political agenda for the foreseeable future? Half the stock
on Enron employees' 401K retirement plans was Enron paper, contributed as a
company match, for which, of course, Enron took tax deductions. Then, when
Enron went into its final plunge, Enron's executives froze the stock on the
401K plans, thus denying workers any chance to salvage their retirement
funds, even as the stock went through the floor. Senior executives skipped
clear of the rubble, and then sent in cops and grief counselors to subdue
their furious employees.
September 11 interrupted many political conspiracies in America,
few more fraught than the long campaign to "reform" Social Security. And, as
with many other nefarious projects, September 11 placed the Bush team on far
more favorable ground than the mire in which he found himself at the end of
the summer, unable to balance the books without a raid on Social Security's
famous lockbox, meaning the pledge not to use any surplus on the Social
Security account for other purposes.
In these triumphant days of the great War on Terror, Bush has to
worry far less about the sort of promises he was spouting on the campaign
trail in 2000 when he was telling crowds that protection of the Social
Security trust fund was going to be one of his prime priorities.
Now, the fall of Enron, whose CEO, Ken Lay, gave Bush $2 million
for his presidential campaign, has once again thrown the reform lobby on the
defensive. But for how long? Consider what a close call the system had in
the Clinton era.
Accounts by Clinton White House insiders this last summer have
made it clear that had it not been for Monica Lewinsky's captivating smile
and the inviting snap of her famous thong, President Bill Clinton would have
consummated the politics of triangulation, heeding the counsel of a secret
White House team headed by Treasury's Larry Summers. Late in 1998, or in the
State of the Union message of 1999, a solemn Clinton would have told
Congress and the nation that just like welfare, Social Security was broke,
had to be fixed and its immense pool of capital tendered in part to the
mutual funds industry. The itinerary mapped out for Clinton by the
Democratic Leadership Committee would have been complete.
It was a desperately close run thing. On the recent account of
Clinton's secret White House team tasked to map out the privatization path
for Social Security, they had gotten as far down the road as fine-tuning the
computer numbers for accounts to be released to the captious mercies of Wall
Street. But in 1998, the Lewinsky scandal burst upon the president, and, as
the months sped by, and impeachment swelled from a remote specter to hideous
reality, Clinton's polls told him that his only hope was to nourish
widespread popular dislike for the hoity toity elites intoning his political
death warrant.
By the end of 1998, the secret team concluded with a heavy heart
that the escalating Lewinsky affair might doom all their efforts. The
president wanted to be seen as doing something dramatic for Social Security,
but nothing risky. So, in an instant, Clinton spun on the dime and became
Social Security's mighty champion, coining the slogan Save Social Security
First.
In his 1999 State of the Union address, Clinton seized the
initiative from the privatizers with a bold new plan that gave substance to
the "Save Social Security First" slogan. He proposed that 62 percent of the
budget surplus be used to build up the Social Security trust fund. He
promised to veto any attempt to divert Social Security trust funds to other
uses, and he urged that 15 percent of the trust fund be invested in the
stock market, not by individuals but by the Social Security Administration.
The Clinton plan as a whole went well with the American people.
Republicans were compelled to insist swiftly that they, too, would gave
priority to the defense of Social Security.
But despite the political perils, Social Security reform will
always loom on the political agenda. The question is: on what terms?
Government can either hand over chunks of the system to Wall Street and
court the risks of Enron writ large. Or government can build on the original
mandate of Social Security as a public endeavor, including one element of
the original Clinton strategy, namely the idea that the Trust Fund acquire
its own assets. In a recession-hit economy these could include public bonds
linked to investment in education or urban renewal, or they could involve
injecting funds into downcast by post-bubble blues. This would be fully in
accord with the hopes of many of the proponents of the Trust Fund when it
was added to the system in 1939.
Alexander Cockburn is coeditor with Jeffrey St Clair of the
muckraking newsletter CounterPunch. To find out more about Alexander
Cockburn and read features by other columnists and cartoonists, visit the
Creators Syndicate Web page at
www.creators.com.
COPYRIGHT 2001 CREATORS SYNDICATE, INC.
