View Full Version : Bush the Great? (Pete Du Pont)

Alan D. Hyde
10-05-2004, 04:25 PM
Courtesy of www.opinionjournal.com (http://www.opinionjournal.com)
(a free online publication of the Wall Street Journal)

Bush the Great?

Maybe, if he continues with pre-emption and reforms Social Security.

Thursday, September 30, 2004 12:01 a.m. EDT

Every four years about this time, with little more than a month to go before the election, we think about who would be a strong president, who can protect our country and lead it to prosperity and us to opportunity.

The best measurement of a president's success is whether his policies and actions had a long-term positive impact for the American people--not just this year or this presidential term, but for decades or generations to come. Lincoln fought a war to end slavery and signed the Emancipation Proclamation, permanently changing America's policies regarding race. Franklin D. Roosevelt established the Social Security system that has helped millions of Americans over seven decades, and Harry S. Truman's Marshall Plan and Berlin Airlift blunted communist expansion into Western Europe. These presidents were strong men whose policies positively and permanently influenced American society.

What of our current president? Will George W. Bush's policies have a positive and significant impact on the future of America? Democrats argue that the Bush presidency is an absolute failure and will have a negative impact on the future of our country--the war in Iraq, tax cuts, his failure to limit international trade to protect American jobs. Some Republicans argue that Bush's large increases in domestic spending will hurt us for decades, and that his steel tariffs continued flawed economic policies.

It is too early to come to a conclusion--judging the success of a presidency requires time and perspective--but two aspects of the Bush presidency may well be good for the country for decades to come.

One is the doctrine of pre-emption, set forth in the 2002 State of the Union address and in June 2002 at West Point. America will not "await events while danger gathers . . . not stand by as peril grows closer and closer," Mr. Bush said in January. At West Point he said America take "pre-emptive action when necessary to defend our liberty and to defend our lives," and since "the only path to safety is the path of action, this nation will act."

Pre-emption is indeed a very different foreign policy--different from the Clinton policy of condemnation but little action in response to terrorist attacks on the World Trade Center in 1993, the embassies in Tanzania and Kenya in 1998 and the USS Cole in 2000, and different from the Carter doctrine of negotiation instead of confrontation. If the policy of pre-emption successfully protects America from future attacks by determined terrorist organizations, Mr. Bush will have had a lengthy and positive influence on America.

The other is the president's intention to build "an ownership society," one in which more Americans own their homes, health-care protection and retirement assets, "because ownership brings security, and dignity, and independence." We have been progressing towards an ownership society since the Reagan administration. Significant economic growth has allowed 73 million families, or over 69% of Americans, to own their own homes--and 52% of households own stock directly or through mutual funds, up from just 20% in 1980.
President Bush proposes to take us further: New financial assistance programs will create seven million affordable homes; the president's new Health Savings Accounts are available to 250 million Americans, each of whom contribute up to $2,600 each year to a tax-free savings account for his future health care expenses. Tens of thousands of people--many of moderate incomes--have done so in the first six months of the program's availability and become "owners" of health-care resources.

But President Bush's most important ownership opportunity lies in his proposed personal Social Security accounts; what he calls "a nest egg you can call your own, and government can never take away." If the latter were to come to pass in a second Bush administration, it would benefit more Americans for more years than even FDR's Social Security system.

Social Security has given millions of Americans retirement checks, funded by the payroll taxes they paid while working. But as the enormous baby boom generation retires, there simply won't be enough workers to pay in the taxes necessary to cover the promised benefits, leaving a $10 trillion deficit. Further, people don't own the Social Security tax payments they have made while working; they have simply paid the money to the government, which has promised to pay retirement benefits to them later on--and meanwhile spent the money.

So the president has proposed giving working people the choice of depositing some of the taxes they pay into personal investment accounts--like 401(k)s--which would belong to them, pay them retirement benefits or, in the case of an early death, be given to the surviving spouse or children. Under the Bush plan, Social Security payroll taxes on working people would not rise, and benefits for current retirees would not be reduced. And every American who chose to enter the program would own a "nest egg" of retirement assets. That would indeed create an ownership society for a great many Americans.

Sen. John Sununu (R., N.H.) and Rep Paul Ryan (R., Wis.) last month introduced such a plan, allowing working people to contribute an average of about half their Social Security taxes (or 6.4% of income subject to the tax) to personally owned retirement accounts, which would be invested in stocks and bonds. The chief actuary of Social Security has calculated that after just 15 years working people would have accumulated $7.8 trillion in their personally owned accounts, an "ownership society" indeed. And instead of needing to increase payroll taxes from 12.4% to 20% to pay owed Social Security benefits, the ownership-society proposal would ultimately increase individual retirement assets so far above $7.8 trillion that the actuary estimates Social Security taxes could be reduced to about 4%.

If the president were to advance such a proposal in January, and it was adopted, it would solve the Social Security solvency problem, avoid large tax increases on working people, give millions of Americans ownership of significant economic assets, and advance the democratic capitalism that has made America the most successful economic nation in the world. And it would make George W. Bush one of America's successful presidents with a policy impact on generations of Americans for decades to come.

Of course the president has to get re-elected, propose such a program, advocate it, and then spend much of his political capital to get it enacted by a reluctant Congress. But that is what presidents are for, and success in such ventures is what makes them great.

Mr. du Pont, a former governor of Delaware, is policy chairman of the Dallas-based National Center for Policy Analysis. His column appears once a month.