Social Security a big issue for Sharron Angle and Harry Reid, but few ideas

By David McGrath Schwartz

Tuesday, June 15, 2010 | 2:01 a.m.

There’s a reason Social Security reform is known as the politically perilous third rail of American politics.

The issue, which seems destined to take center stage in the U.S. Senate race, has a history of derailing candidates who too aggressively talk of changing it.

The popular federal program that guarantees an income for seniors has become the early focal point of the campaign for U.S. Senate. GOP candidate Sharron Angle maintains that she wants to “transition out” of Social Security but is not elaborating on how that would happen. Senate Majority Leader Harry Reid, meanwhile, remains quiet on how to fix the massive federal program that projections show is headed toward insolvency.

Angle, the former Nevada assemblywoman who has strong support among the Tea Party movement, has promised that she will not run to the center or moderate her positions. But she will find herself having to explain and defend positions that polls have shown are not the most popular.

It’s been the Reid campaign’s aim to prioritize, as the first issue, Angle’s position on Social Security — a statement on her website had said that she wants the Social Security system “transitioned out.”

Angle, making a trip to Washington this week to meet with Republican leaders, has been introduced to the national audience through friendly conservative radio and television interviews. In her first television interview since last Tuesday’s primary victory, she had this exchange with a host on Fox News’ “Fox and Friends” Monday morning, in which she denied wanting to “get rid of Social Security”:

Host: “Perhaps it’s a misinformation or mischaracterization, but some have said you are out to get rid of Social Security. That’s not true, right?”

Angle: “Well, that’s nonsense. I have always said we need to make the lockbox a lockbox, put the money in there for our senior citizens. They came here in good faith paying into a system and Harry Reid has put an IOU in for 24 years. He has been raiding Social Security. What we need to do is personalize Social Security so the government can no longer raid it.”

Angle has consistently maintained that she wants to keep the benefit going for seniors in the system. She has been less specific about her plan to get out of the system.

During a debate in May on the public affairs show “Face to Face With Jon Ralston,” Angle said, “We need to phase Medicare and Social Security out in favor of something privatized.” She later added, “Going forward we need to phase it out, give people an opportunity to either opt into the old system or go for a new system where they have their own health care savings account or they have their own retirement savings account, which is portable and goes with them from job to job, and for those who are entering the workforce right now they come on to the new system so it’s a phased-in system.”

On her website, she writes, “Free market alternatives, which offer retirement choices to employees and employers, must be developed and offered to those still in their wage earning years, as the Social Security system is transitioned out.”

The Angle campaign did not respond Monday to a request for further clarification of her position on the issue.

Talking about lowering taxes while cutting spending and federal government programs has fired up the Republican base, gotten Angle support in the Tea Party movement and earned her a resounding primary victory against more moderate candidates. But Social Security and Medicare are popular programs. Republicans worry about the future costs of the programs and talk about moving to “free market solutions.” But they have edged away from Angle on that issue.

UNLV political science professor David Damore said the Tea Party movement faces a challenge: though, in the abstract, there’s broad support to reduce the deficit and cut government spending, voters in reality resist cuts in popular services.

In 2005, President George W. Bush tried to privatize a portion of the Social Security program. That was defeated, and Republicans saw their popularity plummet.

Michael Tanner, a senior fellow at the libertarian think tank Cato Institute, said Bush’s proposal in 2005 would have given those under 55 a chance to put a third of the money into a 401(k)-type account. (It also raised a concern about how to pay for the benefits of existing seniors in the system. Social Security taxes that workers pay now are used to pay the benefits of those on Social Security, not, as some believe, set aside to pay future benefits.)

At the time, others in Congress made proposals more aggressive than Bush’s, though they would still have mandated a savings program with a government-guaranteed backstop to make sure no one would live in poverty, Tanner said. But since the Bush administration’s defeat, reform advocates have been even more wary to propose changes, fearing the political damage.

Still, Social Security will be paying out more in benefits than it collects in taxes by about 2016.

Tanner noted that former President Bill Clinton had sought Social Security reform.

“It’s hard to deny there’s a problem,” Tanner said. “You’d have to do a real ostrich imitation. To deny it is economically illiterate.”

Reid spokesman Jon Summers said the senator opposes privatization plans and was the one who killed Bush’s Social Security plan.

In a statement, Summers said Reid wants to strengthen Social Security by, among other things, “cracking down on cheaters who don’t contribute what they owe.” But he was short on specifically how he would do that — which many experts say comes down to the choice of raising taxes, borrowing the money or limiting benefits.

“Implementing any solution will require good faith, bipartisan negotiations,” Summers said. “But that can only happen when leaders in both parties commit to strengthening the program, not privatizing it or phasing it out.”

Deborah Jaquith, spokeswoman for AARP Nevada, which advocates for issues of those over 50, also said the group has not taken a position on how to fix Social Security.

“Congress should act sooner rather than later to address the program’s adequacy of benefits and long-term solvency,” she said. “We know that changes need to be made.” But, she said, she didn’t know what AARP would support or reject.