From the Annals of Social Security Reform

Thu, 20 May 2010 14:55:57 +0000

Via Brad DeLong, here's a post at Firedog Lake discussing the book, The Pact: Bill Clinton, Newt Gingrich, and the Rivalry that Defined a Generation, by Steven Gillon. The title of the post is both provocative and, setting aside my personal disagreement with the fourth word*, true: "How Monica Lewinsky Saved Social Security ..." The post focuses on the important role of Erskine Bowles in bringing President Clinton and Speaker of the House Gingrich close to an agreement on Social Security reform in 1998. When the Lewinsky scandal broke:

Politically, it forced Clinton to seek refuge in the liberal wing of his party, the same group he had agreed to abandon a few months earlier. “All opportunities for accomplishment were killed once the story came out,” reflected a senior White House official. “If we cut a deal with the Republicans on Social Security there was every possibility that the Democrats, who were the only people defending him in Congress against these charges, could easily get angry and abandon him.” With conservatives in an uproar, Gingrich lost his political wiggle room and was forced to appease his right-wing base. If Gingrich did not “feed the conservative beast,” recalled a colleague, he would have been removed from his job as Speaker.

I was very engaged in Social Security reform during this period, largely based on a proposal that is outlined here and that has gone through several iterations since. It was pretty clear that a deal was in the works and that the process was moving along. It was even more clear that the Lewinsky scandal ended it all. I had the dubious honor of testifying before the Senate Finance Committee on September 9, 1998, the day the Starr report was delivered to Capitol Hill. I also testified before the Senate Budget Committee on January 19, 1999, during the heart of the impeachment trial. To say that I couldn't get much traction with some very distracted Senators would be putting it kindly.

*My personal disagreement with the word "saved" is that not reforming Social Security when we had this window of political opportunity didn't do anything to save the system. The system still faces a funding shortfall. All we have "saved" is a few cohorts of workers from having to pay additional monies into the system to close that funding shortfall and a few cohorts of beneficiaries from having to accept lower benefits to close that funding shortfall.