Social Security reform may actually have a better chance to succeed now that Congress and the White House are controlled by different parties. After his re-election in 2004, President Bush wasted his political capital on a misguided effort to transform the retirement system by insisting on a shift to investment accounts. Democrats, then in the minority, found it easy to kill the discussion by labeling Bush's plan "privatization," an unpopular notion with many Americans.
Now Republicans and Democrats share power, and both sides should have gotten the message from voters that they expect a bipartisan effort to solve the nation's most challenging problems. One of those is how to fund Social Security far into the future without bankrupting the Treasury.
The Bush administration has signaled that it is willing to drop its insistence on private accounts if Democrats will come back to the bargaining table. There are other signs that Bush is willing to compromise, including his choice of Henry Paulson as treasury secretary. Paulson, a political pragmatist, understands the undeniable threat both Social Security and Medicare pose to the economy as the baby boom generation heads into retirement.
So if Bush has been forced into dropping private accounts as a nonnegotiable part of reform, Democrats should be willing to meet him halfway. It will take courage. Democrats have made political gains in the past by scaring voters, particularly retirees, about Social Security.
First, Democrats have to admit the danger is real. If current trends hold, the Social Security trust fund will be exhausted in 36 years. Fixes cannot be quick and will not be painless. There will have to be a payroll tax increase, cuts in benefits or some combination of the two. It is in everyone's interest to see that those fixes do the least harm to the neediest Americans and give every worker enough time to plan for the new reality.
Democrats can't afford to turn down Bush's offer to compromise if they are to govern credibly. The truth is, Social Security and Medicare will not be reformed unless both parties share the responsibility and the political heat. The only disadvantage should go to the side that refuses to negotiate in earnest.