"It's time for some political jujitsu"

The effort to reform Social Security (as opposed to perpetuating and exacerbating the status quo) has unfolded in time-honored fashion from the moment President Bush handed off the effort to Republicans on Capitol Hill: Democrats have completely distorted and smeared the idea, the majority has fled for their old hiding places in the tall grass, and the Extreme Media is gleefully (and prematurely) proclaiming reform deader than a smelt. The depiction of this process has resembled an untied balloon after the air is released from it.

But reform is not dead. All it takes is a refocus on what has been the only true reform proposed all along.

[T]he White House should embrace an idea that three GOP senators will propose to[day]. They want to seize back the moral and political offensive on the issue of personal accounts. By proposing the creation of personal "lockboxes" to ensure that the government can't raid Social Security taxes for other programs, they would force opponents to cast a vote against the idea that individuals should have ownership and control over some of their own retirement funds....

Politically, their proposal does disarm some of the most oft-used arguments against reform. It would create no new debt for the government because, unlike President Bush's proposal, the personal accounts would use only the surplus payroll taxes now flowing into the Treasury. That surplus will hit some $85 billion next year, and grow in succeeding years to the point that it could provide every worker who wanted one with a personal account of some $1,200. The surpluses will total some $2.5 billion until 2017, when Social Security starts running a deficit as baby boomers begin to retire. Preventing that money from being "raided" by a spendthrift Congress and White House could be enormously popular with a cynical public.

In addition, if the personal accounts were limited to no-risk, but marketable, Treasury bills, the argument about the "scary and risky" stock market investment of payroll taxes would be neutralized. Converting the nonmarketable IOUs the government now holds into marketable Treasury bills issued to taxpayers would create an asset that individuals would own and be able to pass on to their heirs. If history is a guide, such risk-free Treasurys would earn an annual rate of return of between 2.5% and 3% - much better than Social Security will deliver. The surpluses would become real assets owned by citizens rather than government IOUs (or, more accurately, "I owe me's") piling up in a filing cabinet in West Virginia.

The strategic aspect of market-based Social Security reform has always been to get its nose inside the proverbial entitlements tent. Once established, the momentum for further such reform would build from there as the public saw that the Democrats' fearmongering lies were precisely that. The Democrats are sorely aware of this, which is why they're pulling out all the stops to demonize reform and bulldoze it into a contrived grave.

The DeMint/Graham/Santorum bill disarms the DisLoyal Opposition of all its boogeymen and brings the debate right back to brass tacks: why should the American people not own their own retirement instead of being forced to rely upon an institutionalized ponzi scheme that is an inevitable actuarial disaster?

The Bushies aren't against the idea, but fret that it doesn't solve the underlying insolvency problem. But Senator DeMint has the right tactical take on the matter:

Senator DeMint told me that he believes that once personal accounts "got off the ground, you would see them become enormously popular," and Congress would be compelled to find a way to reform the system to ensure their continuation after payroll tax surpluses dried up in 2017.

In a word: incrementalism. That's how the federal government grew so huge, and that's the only way it's going to be shrunk. And as Senator Graham points out, "There's lots of public agreement that Social Security taxes should be used for Social Security benefits...This is a good, commonsense start to what will apparently be a long debate about solvency."

In fact, that has been a position long advocated by Dem pretend-deficit hawks - remember Al Gore's "Social Security lockbox"? While I have no doubt that those same Dems would flip over on a dime and argue against the idea, how much credibility would they have left, particularly when the arguments they had been making would have ostensibly been addressed?

As an added bonus, earmarking the SS surplus for [GASP] Social Security would provide an added brake on runaway federal spending:

Would the deficit increase if Congress used the Social Security surpluses to create personal accounts rather than finance current government spending? Not if Congress found the will to cut federal spending by roughly 3% a year. Even if they don't, the unavailability of the payroll taxes to fund other programs could be useful. As Federal Reserve Chairman Alan Greenspan told Congress in March, "One can credibly argue that [the trust funds] have served primarily to facilitate large deficits in the rest of the budget." He went on to argue that personal accounts would add to overall savings, which "in turn, would boost the nation's capital stock. The reason is that money allocated in the personal accounts would no longer be available to fund other government activities." In other words, once Congress couldn't get its mitts on the payroll tax money, it would be put to more productive use in the hands of individuals owning their own accounts.

Senator Graham believes that the notion of protecting the SS surplus (while there still is one) will attract bipartisan support. On the other hand, he also believed that cutting a fool's deal with the Democrats instead of breaking their confirmation filibuster would get the President's judges confirmed and usher in a new golden era of comity, brotherhood, and kumbayaism, and John Bolton can tell you how that's turning out.

But the bottom line is the Republicans have the numbers to, if it comes down to it, ram the DeMint/Graham/Santorum bill through the House, and either lure over enough red-state Senate Dems to attain cloture or put the minority in the awkward position of having to explain why they're blocking manifestly popular legislation.

What matters at this stage is not the details, but the symbolism. Dems get that - and maybe, just maybe, Republicans are starting to as well.

[HT: Blogs for Bush]

UPDATE: NRO concurs....