Bush divides boomers with plan

WASHINGTON – President Bush is drawing a long gray line through the baby boom generation, hoping to keep the oldest at bay and the youngest at his side as he pursues drastic changes to Social Security.

Gingerly touching the third rail of politics, Bush said in his State of the Union address, “I have a message for every American who is 55 years or older: Do not let anyone mislead you. For you, the Social Security system will not change.”

But it will change dramatically for people under 55, if the president gets his way: Benefit cuts, increasing the retirement age and discouraging the early collection of retirement checks are all on the table.

While urging Congress to create private investment accounts for Social Security taxes, he told the under-55 set, “Your money will grow over time, at a greater rate than anything the current system can deliver.” With that line, Republicans jumped to their feet and applauded while Democrats sat glumly in their seats.

Bush can’t guarantee market-based private accounts will always yield better rates than the current program, but that might not matter to young and middle-aged Americans who have long assumed Social Security would sputter before they grew old.

People under 55 are generally more savvy about investments than their parents and grandparents who were raised during the Depression and consider Social Security a birthright. A recent Democratic poll found that nearly two-thirds of people under 50 believe that Social Security will pay lower or no benefits when they retire.

People over 50 have much more confidence in the system.

Independent pollsters with the Pew Research Center found that 58 percent of people 18-54 support private investment accounts. Among those 55 and older, only 45 percent do.

Bush sought to keep the young and middle-aged on his side by appealing to their parental and material instincts. “You’ll be able to pass along the money that accumulates in your personal account, if you wish, to your children and grandchildren,” the president said. “And best of all, the money in the account is yours, and the government can never take it away.”

At 58, Bush tried to bond with people on the older side of his gray line, urging them to help make Social Security safe beyond their time. “As we see a little gray in the mirror – or a lot of gray – and we watch our children moving into adulthood, we ask the question: What will be the state of their union?” the president said.

Bush is gambling that the country has changed enough demographically (fewer Depression-era voters who view Social Security as untouchable) and economically (more people with experience in the investor class) for him to tackle a political taboo.

Politicians have long been warned that Social Security is “the third rail of politics,” a reference to the deadly effect of touching the electrified rail that makes some trains go.

“It’s dicey, but it might work,” said Democratic strategist Jim Duffy. “He’s telling people who are directly impacted by Social Security, the people getting it now or about to get it, ‘You don’t have to worry about me cutting your benefits. But there’s not enough money to go around so your children and grandchildren are going to play by a different game.’ “

“Bush knows that their children and grandchildren don’t believe they’ll get Social Security anyhow,” Duffy said.

But there are troubling signs for Bush. A recent GOP poll found that sentiment swings against personal accounts when near-retirees are exposed to a series of common arguments for and against Bush’s plan.

“It is important to consider this data in the context of the 2006 midterm elections,” said the polling memo distributed to GOP lawmakers. “Voters 55 years of age or older will make up fully 40 percent of the vote.”

Young voters and near-retirees may be less receptive when they learn the details of Bush’s plan: a big reduction in benefits for young workers when they retire, larger still if they choose to establish a personal account. Nervous Republican lawmakers are already talking about lowering the exemption age to 50.

Bush is counting on getting credit for trying big things. In addition to overhauling Social Security, the president wants to place limits on medical malpractice lawsuits, require math and reading tests for high school students and push through his slate of conservative federal judges – not to mention his vision of a democratic, peaceful Middle East, starting with Iraq.

Democrats, divided and still stumbling after election defeats in November, struggle to respond to Bush. They’re quick to criticize him, but slow to offer solutions of their own, some Democrats acknowledge.

“It’s an important thing to stop the worst of what the president is doing on foreign and domestic policies. But we can’t be viewed as the defenders of the status quo,” said Democratic consultant Steve Ricchetti, a top adviser in the Clinton White House. “On each of these issues, from the war on terror to Social Security, we’ve got to convince voters that we have a credible alternative.”