Hillary's Generation Gap

Why Social Security reform withers on the Beltway

Hillary Rodham Clinton may not win her bid for a U.S. Senate seat from New York (in fact, according to some, she still may not run). As the decidedly mixed reactions to her psychobabble-filled comments in the inaugural issue of Talk–not to mention her disastrous tryout as national health care czarina–suggest her political instincts are far from perfect. But there's no question that she understands why Social Security and Medicare are popular, and why there will likely be no serious reform of those programs until they actually collapse under their own fiscal contradictions.

In a March speech at the National Education Association's Women's Equality Summit, Clinton laid bare why old-age entitlements remain inviolable despite widespread acknowledgment that they are both inefficient and unsustainable. Social Security, she said, is a "family protection system" that keeps families together by keeping generations apart.

"Were it not for Social Security," she elaborated, "many of us would be supporting our parents. We would take them in, we would do what we needed to do to try to provide the resources they required to stay above poverty, to live as comfortably as we could afford."

While one might think this is precisely the sort of extended family situation the author of It Takes A Village would valorize, nothing could be further from the truth. "That would cause a lot of difficult decisions in our lives, wouldn't it?" she observed. "There would be many families who would have to choose between supporting a parent–an elderly parent–and sending a child to college. It becomes even more pronounced if we add Medicare into that equation….[Supporting parents or grandparents] would mean an economic responsibility and an economic burden that we would feel required to shoulder."

No one, Clinton implies, wants that: not seniors, not their middle-aged children, and not their grandchildren. In suggesting this, she is playing generational politics at its most brazen–and its most effective. She explicitly pits college hopefuls against retirees in a sort of death match, with the baby boom generation standing in as the beleaguered yet altruistic referee (a scant 15 years or so from retirement themselves, boomers have more reason than not to maintain the status quo). After conjuring images of resentful teens and needy elders fighting over the remote–if not food, clothing, and shelter–in family rooms across the country, she offers up a rationale that everyone can not only live with but feel good about:

"In a very real sense, Medicare and Social Security say to our older people: We're going to help you remain independent …because of what you've done for our country–the families you've raised, the jobs you've held, the incomes that you've contributed to the United States, the wars you've fought–we're going to help, as a nation, to support you. And by doing so, we're going to free up the resources that might otherwise have to come directly to you from your family, so that they can do what you did–raise the next generation, send their children to college, hold down the jobs that enable them to move forward."

Clinton's scenario is, of course, simply mumbo-jumbo. The money to "free up" those "resources" comes from the very people to whom she's pandering. It comes from the 15.4 percent payroll tax, split between employee and employer, on the first $72,600 of every individual's wages. Had "older people," whom she seems to assume have no savings or retirement benefits apart from Social Security, not been forced to pay into a system that produces negative returns compared to private-sector pension plans, it's unclear how much largess they would require from their children or grandchildren. If "younger people" were allowed to invest their FICA taxes, they might throw off enough wealth to comfortably support Grandpa. True to her boomer roots, Clinton's encomium to senior citizens is undercut by her barely concealed hostility at the thought of "shouldering" responsibility for them, even as she lays the groundwork for today's youth to support her cohort in its old age.

But Clinton offers each group–the young, the middle-aged, and the elderly–good reason not to mess with whatever programs deliver such "independence," however fictive that autonomy might be. And in so doing, she helps explain why, precisely at a moment when the country is flush with cash and might seriously reform programs set to start imploding within a decade or so, that conversation seems to have lapsed into silence.

Indeed, the ongoing legislative fight over what to do with part of the federal budget surplus–the GOP-controlled Congress has proposed a 10-year, $792 billion tax-cut plan, while the Clinton administration wants to draw the line at a figure closer to $250 billion–underscores that Social Security and Medicare enjoy deep and abiding support. While Republicans and Democrats dicker over the size and scope of modest tax reform, they are in absolute agreement when it comes to preserving the "fiscal integrity" of the country's old-age programs. In fact, Republicans, who not so long ago spoke loudly about privatizing at least part of Social Security, have lately been crowing instead that the president, who "originally proposed protecting only 62% of Social Security receipts [has] bowed to GOP demands to protect 100%" of all contributions.

By articulating the reasons why Social Security and Medicare are so appealing, Hillary Clinton helps to explain why the reform talk has been replaced with something else altogether. And why it will be nearly impossible to do the same with Social Security and Medicare.