This year's Republican victories in U.S. House and Senate races have been largely attributed to the popularity of President Bush. But beneath the surface, something else was going on, as many races across the country also became referendums on Social Security reform.
In many of the close races across the country, Social Security became a key issue in debates, stump speeches and campaign advertisements.
In most of these races — despite repeated attacks from their opponents that individual accounts would "Enron-ize Social Security" or "put retirees' security at risk" — the pro-reform candidate won.
And in a few races, Republicans actually took the initiative and challenged their Democratic opponents to explain how they would solve the program's $25 trillion long-term debt.
These results show that the power of the "third rail of American politics" is gone. Social Security, the issue that once delivered mind-numbing jolts to any candidate who touched it, has been reduced to little more than a spark.
Sen.-elect Elizabeth Dole, R-N.C., was perhaps the most outspoken proponent of personal retirement accounts during the 2002 campaign. Yet, despite incessant attacks by her opponent asserting that personal accounts would bankrupt Social Security, she won with 54 percent of the vote.
Other Republican candidates in close races — including John Cornyn in Texas, Wayne Allard in Colorado, Lindsey Graham in South Carolina, Jim Talent in Missouri, Norm Coleman in Minnesota, Saxby Chambliss in Georgia and John Sununu in New Jersey — faced similar criticism on Social Security from Democratic opponents but stood their ground on their support for personal retirement accounts.
Even John Thune — Republican Senate candidate in South Dakota — went on the offensive with his Social Security reform message and fell just 500 votes short of unseating a popular incumbent in the back yard of Senate Majority Leader Tom Daschle.
Several points should compel both pro-reform Republicans and Democrats to act. First, despite the tumbling market and corporate scandals, a recent USA Today poll shows that more than half of Americans — especially younger workers, who actually will be affected by reform — support the idea of personal retirement accounts.
If half of Americans support personal investment in these worst of times, support can only grow as the markets improve.
Second, the markets will get better. We are in the middle of a market slump right now. But over the long term, the market is stable and investors earn money on what they invested.
A worker will typically invest 35 to 40 years or longer for retirement.
Over any 35-year period during the last 128 years, the market has always returned a 6.4 percent average annual rate of return (after inflation). Even the lowest-earning 35-year period, which ended in 1921 and averaged 2.7 percent per year, would have allowed investors to earn money on what they invested.
Third, we simply can't continue on our current course. Social Security faces a $25 trillion long-term debt. And if we don't engage in structural reform, the debt can only be paid by raising taxes by half or cutting benefits by a third. Both these options make Social Security a bad deal for future workers and/or future retirees.
Election 2002 would have been an essentially issueless campaign, except that many Democrats insisted upon making the race a referendum on Social Security. The voters have spoken. Now it is time to act.