#7 - Democrats for personal retirement accounts
President Bush has encountered nearly unanimous opposition from Democrats on Capitol Hill who reject his plan to allow Americans to invest a portion of their Social Security taxes in personal retirement accounts.
However, some Democrats have embraced this idea in the past, including at least one on the Hill who previously applauded this reform.
* Senator Joseph Lieberman (D-CT) supported Social Security choice, until he became the 2000 Democratic vice presidential nominee. Then he changed his mind. Before that, he said this:
"A remarkable wave of innovative thinking is advancing the concept of privatization," Lieberman told the Copley News Service in 1998. He added that "individual control of part of the retirement/Social Security funds has to happen." With individual accounts, he continued, "We have a chance not only to do something right, but to give people more confidence about what their retirement years will be like... I think in the end that individual control of part of the retirement/Social Security funds has to happen."1
* In 1999, the Democratic Leadership Council published the New Progressive Manifesto. It declared: "We must gradually convert Social Security from a transfer program to a new system of individual private savings supplemented by modest public pensions for the needy."2
* Former Senator Bob Kerrey (D-NE) also favors personal accounts. He recently wrote that "liberals are wrong to fear that President Bush's proposal represents a threat to Social Security." He suggested that fellow liberals should engage this issue and "might even argue that accounts be opened at birth, thus giving Americans the longest possible time to accumulate wealth." He also said liberals "could see the wisdom of changing the tax code so that no income taxes were levied on income that went into these savings accounts." Kerrey added: "None of this will happen if liberals merely shout, 'Hell no, we won't go.'"3
* Wade Dokken, CEO of American-Skandia Insurance, calls himself "an FDR-Truman-Kennedy-Johnson-Humphrey-McGovern-Carter-Clinton Democrat." He wrote a book in 2000 called New Century, New Deal in which he endorsed Personal Retirement Accounts. He praised George W. Bush's idea and said that personal accounts would "shift our focus from poverty prevention to wealth creation and turn every worker into an owner."4
* President Bush named former senator Daniel Patrick Moynihan to co-chair the bipartisan commission that advocated personal retirement accounts (PRAs). The late New York Democrat was considered one of his party's deepest thinkers and an expert on Social Security. He was enthusiastic about PRAs and once predicted that they would help build estates - "for doormen, as well as those living in the duplexes above."5*Even Democratic icon Franklin Delano Roosevelt, who launched Social Security on August 14, 1935,6 said in a speech that year that the system's pay-as-you-go structure, which persists even today, eventually should be "supplanted by self-supported annuity plans." While not precisely President Bush's concept, self-funded annuities are much closer to the "Ownership Society" model Bush advocates than to the Great Society welfare state mentality that today fuels many foes of personal retirement accounts.7
1 Peter Ferrara, "Lurches... With Flip Flops," The Washington Times, August 24, 2000, p. A17.
3 Bob Kerrey, "Pride and Prejudice," Wall Street Journal, February 1, 2005, available online at http://www.opinionjournal.com/editorial/feature.html?id=110006234 as of April 12, 2005.
4 Deroy Murdock, "Dems Turn on Gore's Social Security Plan," National Review Online, October 5, 2000, available online at http://www.nationalreview.com/comment/comment100500c.shtml as of April 12, 2005.
5 Daniel Patrick Moynihan, "Building Wealth for Everyone," New York Times, May 30, 2000, p. A-23.
6 Peter Ferrara and Michael Tanner, A New Deal for Social Security, Cato Institute, Washington, D.C., 1998, p. 13.
7 Jay Ambrose, "Some Liberals Favor Private Accounts," Scripps Howard News Service, March 10, 2005, available online at http://www.shns.com/shns/g_index2.cfm?action=detail&pk=AMBROSE-03-10-05 as of April 12, 2005.