Cover story -- Bush's Ownership Society
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Issue Date:  February 4, 2005

Plan to alter government's role

Bush's 'Ownership Society' neglects common good, critics say


George W. Bush’s “Ownership Society,” like Franklin Roosevelt’s “New Deal” and Lyndon Johnson’s “Great Society,” is about more than mere tinkering with federal budgets and programs. Indeed, like its predecessor presidential slogans, the phrase encompasses an ambitious agenda that aims at nothing less than a grand rewrite of government’s role in the social compact.

The difference, of course, is that Roosevelt and Johnson proposed to expand government programs for the elderly and poor, while Bush’s ownership society foresees “empowered” individuals deciding on their own how best to provide for retirement and pay for medical care.

Critics quip that the “ownership society” means “you’re on your own.” And they point directly to proposals floated by the administration that would encourage workers to divert a percentage of the payroll tax that funds the Social Security system into stocks and bonds. Such “personal accounts” amount to partial privatization of a system that needs bolstering, not undermining, say the many critics of Bush’s plan.

The president, however, shows no sign of backing away from the idea.

“It was a different society back a couple of decades ago because a person stayed with the same company, had the health plan from the company, retirement plan from the company,” the president told an August 2004 campaign event. Today, said Bush, “the economy is changing and, therefore, government policy ought to change with the times.” He continued, “One way to bring stability and security into a person’s life is to encourage ownership.”

But will the Bush initiatives bring the “stability and security” the president promises, or subject the vulnerable to the vicissitudes of an unforgiving marketplace that rewards winners, punishes losers and, critics emphasize, provides no guarantees?

“People buy lottery tickets to get rich, or invest in their own businesses to get rich, but people don’t have a pension to get rich,” said Teresa Ghilarducci, associate professor of economics at the University of Notre Dame. “Pensions are about security.”

Said Ghilarducci, “Catholic social teaching uses two principles that the American people understand: solidarity and subsidiarity. Our [overall retirement] system now actually achieves both goals.” When it comes to solidarity, said Ghilarducci, the universality of Social Security recognizes that “we’re all Americans, we all suffer from the risk of living too long.” And when it comes to subsidiarity -- the idea that societal problems should be dealt with at the level closest to the individual necessary to solve the problem -- the other components of the nation’s retirement system, such as government-subsidized private pensions and home mortgages, ensure that “people have dignity and are able to make their own decisions.”

What it was intended to do

The question of whether Social Security should be viewed as a wealth-generation tool that maximizes returns or as a backstop insurance plan designed largely to ward off destitution is at the core of the debate. “You need to get back to the question of what Social Security was intended to do,” said David O’Brien, professor of history at Holy Cross College. “It was designed as a pension plan that protects all of us -- it was for the common good and not just for each individual in the system.” The Catholics who helped design the system in the 1930s, such as Msgr. John Ryan of the National Catholic Welfare Conference, would “have a lot of questions” about the Bush proposal, said O’Brien. “He never liked the idea of speculation,” O’Brien said of Ryan, while the notion of “increased shareholder equity” would rank low on a list of Catholic social justice priorities.

Yet, said Kevin Schmiesing, research associate at the conservative Acton Institute for the Study of Religion and Liberty, “the concept of an ‘ownership society’ -- that is, a society characterized by widespread private ownership of property -- fits perfectly into the vision laid out by Catholic social teaching. Whether or not the details of President Bush’s agenda fit as perfectly remains to be seen, but I think there are some promising indications, including Social Security reform.”

The current Social Security system, said Schmiesing, is “unsustainable” because it relies on fewer and fewer workers to support more and more retirees. “This is a problem that has to be addressed and the president is right to try to address it now,” said Schmiesing.

But the system is also unfair, said Schmiesing. “The fact of the matter is that, in the United States, the over-65 demographic is the wealthiest age group. Meanwhile, the Social Security tax is among the most ‘regressive’ taxes since it takes an equal percentage of low-wage workers’ income and high-wage workers’ income. Since Social Security is … a transfer payment from workers to retirees, it is hard to square this situation with solidarity.”

While “Social Security is a lifeline for many poor seniors,” continued Schmiesing, “it … also functions merely as a kind of retirement account for other, wealthier seniors. I don’t see that it fits the principles of Catholic social teaching to have low-wage workers who are struggling to raise families subsidizing the retirements of well-to-do retirees. The challenge is to retain what is valid in the idea of Social Security -- a safety net for those too old or otherwise unable to work -- while eliminating the injustices and dysfunctions in practice.”

Meanwhile, the “ownership society” concept is said to impinge unfavorably on what many see as the nation’s most testing domestic crisis, the 40 million-plus Americans who lack health care coverage. “To this administration, speaking of an ‘ownership society’ means you go out and find and pay for cheap coverage with a big deductible,” said Ann Neale of Georgetown University’s Center for Clinical Bioethics (NCR, Nov. 5), a panelist at the liberal Center for American Progress discussion on “Health Care, the Budget and Morality,” held Jan. 25. “It’s putting it on you,” she continued, “and it certainly doesn’t help the least well off.

“I certainly don’t think the ‘ownership society’ is community-oriented -- it focuses on the individual without any kind of notion that the government is a vehicle for the common good,” said Neale.

‘Not Marx, but the Bible’

Laurie Zoloth, medical ethics and humanities professor of Northwestern University, told the gathering that any close reading of the scriptures or Quran reveals “an extraordinary concern for how land and foods are allocated and re-allocated to the poor. It’s not Marx; it’s the Bible,” said Zoloth. “In the biblical texts you are … renting from God, and sharing in the good land God gave the chosen people.

“It’s not who owns it,” Zoloth continued. “It’s that you have to figure out how to balance owning and possession and family against the greater narrative of the society. The balance, about people feeling it’s fair to own, fair to have, but within limits, is part of the progressive religious tradition.”

The Bush program, said Jeff Gates, is based on a model “that every faith tradition has warned against: Do not give undue deference to values that can only be measured in monetary terms.”

Spiritual objections aside, the former Senate Finance Committee counsel and author of The Ownership Solution told NCR that the Bush Social Security plan won’t work. More than 50 percent of the capital gains generated by the stock market build-up of the 1990s went to just 1 percent of the population, Gates said. Meanwhile, fee-generating investments controlled by Wall Street money managers rose tenfold over the last 25 years. Diverting payroll contributions to the stock and bond markets, said Gates, will redound not to the benefit of retirees, but to the already wealthy and those who will earn fees managing the infusion of new funds into the markets.

The Social Security portion of the president’s ownership society is threatened on a number of fronts. Already, key Republicans in Congress, including House Ways and Means Chairman Bill Thomas, have raised questions about both the substance and timing of the president’s plan. Democrats are nearly unanimous in their opposition to private accounts. Others point to more pressing problems, such as an impending Medicare financial crisis and rising state obligations under the Medicaid health care system.

Meanwhile, The New York Times reported Jan. 25 that key Christian conservative leaders, including Focus on the Family’s James Dobson and Jerry Falwell, told the White House they will oppose the Social Security initiative unless the administration actively pursues a constitutional amendment banning gay marriage.

Despite the growing chorus of doubt, Bush appears undaunted.

In 1935, Social Security’s original actuarial projections indicated the system would be self-financing -- meaning that Social Security would take in more revenue than it distributed in benefits -- through 1960. In fact, in 2005 the system continues to generate more income than expenses, though the Social Security trustees estimate that there will be more beneficiaries than contributors beginning in 2018, at which point the system will have to redeem the government bonds it has purchased to finance its obligations.

Crisis? The president and private account backers say so, though supporters of the current system argue that some relatively minor tinkering (small adjustments in benefit eligibility, modest increases in the payroll tax, an increase in the payroll tax cap) could sustain the system for several generations to come.

But on one level the discussion is not really about Social Security, though that’s the current venue. Rather, it’s a dispute about government.

“The difference is between those who lean toward government as the primary means of promoting the common good and those who think that the same end is usually better achieved through institutions and mechanisms other than government,” said the Acton Institute’s Schmiesing. While acknowledging the need for a “floor” of government benefits to protect the elderly poor from destitution, Schmiesing argued that “we need to shift primary responsibility for providing for seniors from government to individuals, families, churches and other institutions.”

That “shift” in responsibility is at the core of the Bush ownership plan -- and not only in Social Security and health care, but in housing, education and other domestic areas as well. In his inaugural address the president pledged a U.S. commitment to end tyranny around the world. His agenda on the home front appears no less ambitious.

Joe Feuerherd is NCR Washington correspondent. His e-mail address is Arthur Jones is NCR editor at large. His e-mail address is

Health care briefing puts budget priorities to moral test

Fresh from the president’s far-reaching and high-minded inaugural speech, the Bush administration will get down to the nitty-gritty of governing when it releases its proposed 2006 fiscal year budget following the president’s Feb. 2 State of the Union address.

The frayed social safety net will likely be torn if the Bush priorities become law, according to those gathered Jan. 25 at the Center for American Progress briefing on “Health Care, the Budget and Morality.”

“The [federal] budget isn’t just a collection of numbers in a ledger; it is the most tangible expression of our nation’s priorities and of our values,” said center president John Podesta. “Tragically,” continued the former Clinton administration White House chief of staff, “all indications are at this point it will fail not only to honor the moral values we Americans share, it will at times mock them. This budget fails to meet the greatest moral test of all: that there are 45 million American men, women and children going without health care because they lack health insurance.”

Bishop Frank T. Griswold, presiding bishop and primate of the Episcopal Church, USA, described the federal budget as “a moral document. It tells the truth about our values and priorities. From the religious perspective, care for the needy is a moral imperative -- yet we glibly use the phrase, ‘one nation under God,’ and I find myself wondering, ‘What does God think?’ ”

National compassion, the compassion of the common good, said Griswold, “needs to be made concrete.” And while it might sound “high flown, one way to make it concrete is the federal budget as an instrument of compassion.”

Within five miles of the White House and Capitol Hill, the poor have fallen far behind, said Ann Neale of Georgetown University’s Center for Clinical Bioethics. She provided a statistical insight: In wealthy Ward Three, where Georgetown University is located, there is a rate of 1.2 deaths per 100,000 live births. In Ward Six, low-income Anacostia, the rate is 7.1.

The deeper question before the panel was what it might take to galvanize a nation into demanding a more balanced and just society. Neale said, “In this country we’re experiencing a diminution of civic engagement, and a waning of community and solidarity.”

Griswold added, “I wonder if one difficulty is that in broad strokes people may be altruistic but self-referential, and live with such an undeveloped notion of the common good that when comfort is involved we often side with what benefits us and not the larger interests of the community.”

How to turn discussion into action was evident in questions from an audience of some three-dozen attendees. Their other issues concerned the apparent withdrawal of progressive religious leaders from the public square, leaving the field to the religious right; the inability of religious progressives to clearly articulate their case in the face of a religious right that has its views down to catchy sound bites, a clarity that makes a clear impression on members of Congress; and a worrisome sense that the mainline Protestant churches and the Catholic church have opted for saying, “We don’t do politics; we do religion.”

-- Arthur Jones

National Catholic Reporter, February 4, 2005

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