Analistas 05/04/2015

Remembering Harry Reid’s Bold Alliances

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(Read Mr. Weigel’s piece here)

I remember that episode very well, for several reasons. One was that I, too, was writing a lot, debunking one bad argument for privatization after another. It wasn’t the first time I had done that kind of thing, but this debate was different in two ways: It was really intense, and for once my side of the argument won the political fight. It was also a formative period for my perceptions of how policy arguments actually play out in modern America. There are always three sides here: the right, which isn’t interested in facts or logic; the left (which isn’t very leftist - the American left is really the center-left by anyone else’s standards); and the self-proclaimed centrists, who have very little in the way of a constituency in the country at large, but who have a lot of influence inside the Beltway.

And what I learned early on in the Social Security debate was that the centrists desperately wanted to believe that there was a symmetry between the left and the right - that Democrats and Republicans were equally extreme in their own way. And this meant that centrists were always looking for ways to say nice things about Republicans and their policy proposals, no matter how bad those proposals were.

So in 2005, Mr. Bush was making a dubious claim, coupled with a complete non sequitur. First, the claim that Social Security was in crisis; second, that privatization was the answer, even though it would do nothing at all to help the system’s finances. How could centrists say nice things about such a crude bait and switch?

Well, here’s Time magazine’s Joe Klein on “Meet the Press” in 2005: “I agree with Paul [Krugman] in that private accounts have nothing to do with solvency, and solvency is the issue. I disagree with Paul because I think private accounts [are] a terrific policy, and that in the information age, you’re going to need different kinds of structures in the entitlement area than you had in the industrial age. But it is very hard to do that kind of change under these political circumstances where you have the parties at such loggerheads. The Democrats have for the last 10 or 15 years blatantly, shamelessly demagogued this issue. They’ve offered nothing positive on Social Security or on Medicare or on Medicaid, and it’s time for them to compromise here.”

Say what? To his credit, Mr. Klein later admitted that he was all wrong here. But the point is that what we saw in this instance was the instinct to come up with something - anything - that would let centrists pretend that there was symmetry between the parties.

Incidentally, about Democrats doing nothing about Medicare (the insurance program for Americans 65 or older) and Medicaid (the health program for the poor or disabled): It’s interesting to look at the budget projections made around the time of the Social Security debate. Back then the Congressional Budget Office projected that by the 2014 fiscal year Medicare spending would rise to $708 billion and Medicaid spending to $361 billion. The actual numbers for 2014 were $600 billion and $301 billion, respectively, despite the Medicaid expansion under Obamacare. At least some of this unexpectedly low cost can be attributed to measures included in the Affordable Care Act. And strange to say, this was achieved without destroying or privatizing those programs.

But back to 2005: What Mr. Reid realized was that it was time to stop courting the “Very Serious People” and instead make an alliance with the DFHs - which isn’t quite shorthand for “Dirty, Foolish Hippies” - who, unlike the VSPs, were actually making sense on both the policy and the politics. It was an important turning point.

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