Friday, August 14, 2009

What FDR’s experience passing Social Security could teach Barack Obama on health care

On Social Security's birthday, Nancy Altman writes in the Los Angeles Times that FDR's model for passing Social Security in 1935 is something Barack Obama should emulate today. While I don't agree with everything she says – and some of the concerns mounted at the time of Social Security's passage, such as that it would push aside private saving, have come true – it's a good look at a historic moment and how its lessons can be applied today.

I wrote on FDR's vision for Social Security – and how it clashes with some on the left today – here.


Bruce Webb said...

Holy Cow! Lions DO lay down with lambs and dogs and cats stop fighting!

I agree with every word of your take on FDR's take on SS as compared to Obama's. Raising the payroll cap and/or any rebates on FICA for lower income workers are exactly the wrong moves for supporters of Social Security.

Though I have a hell of a time explaining this to progressives looking for a free lunch.

Andrew G. Biggs said...

I'm a uniter, not a divider!

JG said...

The Altman piece I think is rather superficial and misses some pretty major differences between FDR than and Obama today. E.g:

1) FDR's Democrats had 69 - 25 control of the Senate, equivalent to 73 votes today, and an even bigger 76% majority in the House. If Obama had 73 Democrats in the Senate and 76% of the House, "framing" might not be such a big concern for him.

2) Even the small minority of Republicans didn't really fight FDR, because businesses quickly realized SS with the 1% payroll tax on them was a much better deal for them than they could get for themselves on employee pension benefits, and supported the Act.

3) FDR had much less possible media opposition than today -- he himself was a radio "star" in his fireside chats, other than that radio was much more entertainment than politics (no talk radio), newsreels were his friend, no internet or cable news channels existed, his only serious media opponents were some newspaper groups. (Very arguably, FDR's biggest political challenges in enacting SS came from Democratic groups who wanted it to skew more "left".)

4) Most importantly, regarding "framing", "talk directly to the American people", and "clearly demonstrating with words and deeds" -- and the big point Altman entirely misses -- FDR actually had a simple, clear plan that he could explain clearly, talk about directly, and demonstrate.

Social Security's original tax and benefit formula was so simple they could print the whole thing in plain English terms on a sheet of paper or small pamphlet or even index card -- and they did, by the millions -- and readers knew everything they needed to know about how it would affect them.

Obama might have accomplished something like that if he'd limited his plan to: "we are going to insure the uninsured, this is what it will cost, this is how we will pay for it, it is a matter of social justice, end", with his 60 votes in the Senate. Clear, explainable, easy to frame.

But then Obama went on to: "And we are going to cut costs and stop the big premium rises everyone is getting -- without cutting benefits, and while you all keep the insurance you've got if you want ... Medicare is costing 30% too much, it will ruin the country! But even though it is a gov't single-payer plan the gov't can't cut that waste because AARP won't go along without getting new benefits -- so we need new benefits! [Orszag to Postrel] ... Why will AARP agree to cut costs later? Because we'll set up a new powerful commission to cut costs -- after I am out of office ... No, you can't read the plan, it isn't written yet, all the committees still have to compromise it together -- but we have to vote on it to restructure 16% of the economy by August! ... It doesn't matter that you can't read it because nobody in Congress understands it either, you need to have a PhD to understand the provisions [as Harry Reid said], etc."

If FDR himself came back reincarnated in Obama's body, how could be explain all that like FDR?