Profiles in Power

By Matt Kibbe and Russ Walker

A year ago, President Bush traveled the country supporting personal accounts to reform America’s Social Security system. Why was the president advocating for Social Security reform? Two dominant reasons: The debt and tax burden on future workers is enormous, and America’s politicians cannot be trusted.

Perennially, Congress and presidents have raided the Social Security tax revenues, spending excess tax receipts on wars, welfare, farm subsidies, and bridges to nowhere. Nothing has been saved for the baby boom generation and beyond, leaving unfunded liabilities in the trillions of dollars. To meet these government obligations, future generations of Americans will be heavily taxed or denied benefits. These are the indisputable facts. We challenge any federal politician to deny this.

Below is a chart by John Cogan of the Hoover Institute that shows the tax burden on future American workers will be 40 percent of Gross Domestic Product (GDP) in 2050. Worse, the excessive taxes will slow economic growth and reduce take-home pay by 30- 40 percent.

President Bush expended extensive personal time and political capital and failed. Why? Senators and members of Congress deigned not to act. Why would senators and members of Congress ignore a looming financial disaster? Simple. Today’s politicians assessed the value of correcting a future problem versus the potential of losing the next election. Changing Social Security and Medicare is difficult and comes with considerable political risk. For most legislators the decision was practical and predictable. Re-election was more important than future tax increases to America’s future generations. Tragically, the lust for power almost always defeats good policy.

The tale of Oregon’s two senators Ron Wyden and Gordon Smith know of the gigantic debt and tax burden being placed on our children and grandchildren. Yet when President Bush took the problem to the American public, both Wyden and Smith were silent. Worse, Wyden and Smith are members of the Senate Finance Committee, where Social Security reform legislation is initiated. When Finance Committee Chairman Senator Chuck Grassley, (R-Iowa), scheduled hearings with the intent to pass reform legislation, Wyden and Smith remained silent. They avoided the issue.

Why didn’t Oregon’s senators actively engage in discussing and proposing legislation that would lead to correcting a gigantic burden? The political risk was too great. There was less political risk in remaining silent. Most important, their silence did not irritate many voters. Particularly they did not offend seniors, who vote in large numbers. Hence the raid on Social Security tax revenues continues. Wyden and Smith, by remaining silent, bought today’s senior vote at the expense of our grandchildren and generations to come.


Wyden appreciates the need for increased savings, especially by the middle class. He knows that tax cuts and savings will stimulate the American economy. Why was Wyden silent? Why wasn’t he leading the debate to create personal accounts, which would increase savings and create wealth for middle-income Americans?

Look at the entities that keep Wyden in the Senate and maintain his position of power. Wyden’s voters are seniors, unions, public employees, and environmentalists. None of these groups advocate for personal accounts. Seniors and unions are actively opposed. Seniors fear change and loathe any tinkering with Social Security that they perceive could adversely impact their government retirement and medical benefits. The unions abhor personal accounts. Personal accounts are owned by the worker, which allows job mobility. This threatens union power. The public employees and environmentalists are indifferent to the concept of personal accounts. Hence, Wyden will not vote for a personal account proposal without the approval of the unions and seniors.

The Senate Democratic Caucus is a second power source that controls Wyden. He became a member of Senate Finance because he abided by the caucus mandates. If he revolts and votes for personal accounts, he will be penalized. Most likely, he would lose his Senate Finance position, which is the most powerful government committee in the world.


Why did Smith, a Republican, remain silent? Why didn’t Smith support the president? Again, elected politicians consider the potential votes gained or lost in their next election when considering a congressional vote or statement. Smith worries about the Portland metropolitan vote more than he worries about his Republican supporters. Smith knows he must carry approximately 30 percent of the Portland vote to win re-election. He is much more concerned about alienating Portland liberals than his Republican base because the base has no choice but to vote for him over any Democrat.

Second, Smith has counted the votes in the Senate. Because Senator Olympia Snowe (R- Maine) is opposed to personal accounts, Smith recognized that personal accounts legislation would not come to a Senate vote. Therefore, rather than debate the Social Security problem and solution, Smith quietly avoided discussing the problem. Thus, Grassley, knowing he had no support from the Democrats and a couple of timid Republicans, withdrew considering reform legislation.

The Senate Finance Committee is the most powerful deliberative committee in the world. It consists of 20 members. Oregon is the only state with two members on it. Again, Wyden and Smith avoided the issue because it had substantial immediate political risk. Wyden, a Democrat, and Smith, a Republican, valued their position of power over actively engaging in a most important debate. Former Senator Robert Dole described the power and prestige of the Senate Finance Committee: “One of the highest honors that can come to a member of the U.S. Senate is to serve on the Committee on Finance. The Committee on Finance has since its creation been associated with some of the most significant and most controversial issues in U.S. history.”

Unfortunately, two senators from Oregon prefer the position and trappings of power, rather than defining and debating significant and controversial issues.

Matt Kibbe is president of the national organization, FreedomWorks. Russ Walker is director of the Oregon chapter of FreedomWorks.

BrainstormNW - November 2006

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