Worst Bush Moments: #7, The Push to Privatize Social Security

Historians will rightly point to Hurricane Katrina, and George W. Bush’s disastrous lack of reaction to it, as the moments the wheels came off his administration.

But it’s important that we not forget that the Bush Administration was already on the ropes, thanks to a previous catastrophic decision, one that could have had disastrous results, if not for the leadership of House Minority Leader Nancy Pelosi, D-Calif., and some unserious, Cheeto-eating bloggers.

George W. Bush, as you may recall, said after the 2004 election that he had political capital, and intended to spend it. And what he wanted to spend it on was an effort to privatize Social Security. This was, of course, a Very Serious Thing To Do. All the Very Serious people agreed that Social Security was totally and completely doomed, and that we Had To Do Something or Everything Would Be Destroyed. The “something” Bush proposed was to let people invest Social Security money in the stock market, a plan that looks totally awesome right now, doesn’t it? Even though there were obvious problems with the scheme — like, say, the market could drop several thousand points over the course of Bush’s second term — all the Very Serious People gravely intoned that the Democrats would have to come on board, because that’s what the Serious People wanted them to do.

Thankfully, Pelosi, backed by bloggers like Josh Marshall, refused to budge. When asked by members of her caucus to produce a competing proposal, Pelosi simply declined, arguing (correctly) that there were no problems with Social Security that raising the FICA caps couldn’t fix. Without Democratic support (well, except for Joe Lieberman), Republicans refused to tinker with the system, and the Social Security fix died.

And Thank the Gods. Because if it had gone through, we’d be reapoing the benefits today. The retirees who are finding half their savings gone at least know they have Social Security benefits to fall back on. Had Bush had his way, they’d know no such thing. It would have been disastrous — and only strong Democratic action prevented the disaster. If only they’d found their spine a year or two earlier — and if only they hadn’t discarded it immediately thereafter.