The Third Rail is Dead

In the 20 years since the late House Speaker Tip O'Neill termed Social Security the "third rail of American politics," you were more likely to find politicians attacking Mom or apple pie than talking seriously about Social Security reform.

As the national retirement program slipped closer to financial insolvency and the rate-of-return for young workers threatened to turn negative, politicians in Washington alternately turned a blind eye to the program's plight or mindlessly demagogued any whiff of reform. But the 2002 congressional elections may finally have turned off the juice to the third rail and opened the way to Social Security reform.

Not that Democrats didn't try to keep the rail charged. Unable to formulate any party consensus on issues like the economy or the war with Iraq, Democrats focused much of their campaign efforts on Social Security. In race after race across the country, Democratic candidates attacked their Republican opponents for having "a secret plan to privatize Social Security."

Advertisements equated proposals to allow younger workers to privately invest a portion of their Social Security taxes through individual accounts to Enron or a "Las Vegas gamble," designed to help the candidate's "wealthy Wall Street backers." Their allies from anti-reform groups like the labor-backed Campaign for America's Future added millions of dollars of their own commercials, as well as ground troops.

Democratic Party spokesmen called the campaign "a referendum on the future of Social Security." The DNC Web site even featured a cartoon of President Bush pushing senior citizens off a cliff to their death. But in the end, in every race where Social Security was a major issue, the pro-account candidate won. Republicans even ran 12 points ahead of Democrats among seniors, a swing back for the GOP, which had been losing its traditional support among seniors in recent years.

Clearly, if Democrats today can't even scare seniors into voting against Social Security reform, it shows how bankrupt the "third rail" routine has become. To see the magnitude of the win for individual accounts, consider: The three top targets of the Campaign for America's Future were Elizabeth Dole in North Carolina, Lindsay Graham in South Carolina and John Sununu in New Hampshire. While some Republicans did attempt to blur their position on the issue, those three never hid their support for individual accounts.

Indeed, when accused of supporting "a risky scheme," they counterattacked, pointing out that their Democratic opponents had no proposals of their own to fix the program's looming financial crisis. Dole even campaigned showing a blank piece of paper as the "Bowles Social Security Plan." All three won.

The list of winners in closely contested Senate contests is a roster of individual account supporters. From Saxby Chambliss and Norm Coleman to Jim Talent, Wayne Allard and John Cornyn, candidates who supported individual accounts defeated candidates who opposed them. In every case, the Democrat attacked the Republican for supporting individual accounts. And, in every case, those attacks failed.

Whatever the other issues involved in those races, it is clear that Democrats can no longer count on Social Security as a silver bullet.

The same holds true in House races. Few congressmen have been as outspoken in their support for individual accounts as Pat Toomey, R-Penn., despite the fact that his Democratic-leaning district has high concentrations of both senior citizens and union workers. Yet Toomey won by a larger margin this year than he had in 2000.

Likewise, Clay Shaw and Shelley Moore Capito -- once thought to be endangered -- took nearly 60 percent of the vote, despite concentrated attacks on their Social Security positions. Other winning pro-account candidates included John Kline in Minnesota who knocked off incumbent Bill Luther, and Steve Pearce, who picked up a new seat in New Mexico.

On the other hand, Republicans who decided to run away from Social Security reform didn't fare so well. Pennsylvania Rep. George Gekas abandoned earlier support for individual accounts, even signing a pledge sponsored by the Campaign for America's Future to oppose them. He lost. In New Jersey, Doug Forrester supported individual accounts in the primary and won. He changed his mind in the general election and lost.

None of this should have come as a surprise. George W. Bush himself had campaigned successfully on the issue in 2000. Public opinion polls have consistently shown that voters support giving workers the choice of owning and controlling their retirement funds. Even during the worst of last summer's stock market decline, a Zogby International poll showed that two-thirds of likely voters backed individual accounts.

The election results are already forcing both parties to rethink how they approach this issue. Democrats are beginning to wonder whether their knee-jerk opposition to any Social Security reform is a winning issue. The day after the election, the web site of the Democratic Leadership Council warned:

"After four straight election cycles of campaigning on an agenda pretty much limited to...attacking Republicans on Social Security, it's time for the congressional wing of the party, and the political consultants who have relentlessly promoted this message as an electoral silver bullet, to bury it once and for all. It has always conveyed the impression that Democrats had little to say on the entire domestic agenda of the nation beyond pandering to seniors, and it has never succeeded in securing a majority."

Thoughtful Democrats like former Sens. Daniel Patrick Moynihan and Bob Kerrey have understood this for years. Possibly anticipating the election outcome, Will Marshall, head of the Progressive Policy Institute, told reporters a month ago that, "Any serious student of [Social Security] knows it's irresponsible only to shoot down every idea for reform and not offer your own. Democrats are in total denial. They don't want to acknowledge the problem."

There are likely changes coming in the Democratic congressional leadership. Will they engage in a thoughtful debate over Social Security's problems and possible solutions, or will they cling to the failed tactics of the past?

For Republicans, they must now decide whether they meant what they said when they promised to fix Social Security. Already some on Capital Hill are raising voices of timidity. Old habits are hard to break. Fortunately, however, the White House remains committed to Social Security reform.

President Bush has shown that he is willing to expend his political capital in pursuit of a higher goal. Here's betting that, aided by a newly elected group of individual account supporters, he will expend some of that capital to turn off the third rail once and for all.

Michael Tanner is director of the Cato Institute's Project on Social Security Choice.