Putin Feels Fallout Over Plan to Eliminate Soviet-Era Benefits
Cash Would Replace Social Safety Net
By Susan B. Glasser
Washington Post Foreign Service
Tuesday, August 3, 2004; Page A12
MOSCOW, Aug. 2 -- Russia is poised to dismantle the remnants of the Soviet-era social safety net for as many as 100 million of its poorest citizens, replacing many free services with cash payments in a controversial experiment that has sent President Vladimir Putin's approval rating down sharply.
Putin's initiative targets such benefits as free public transportation, free medication and cut-rate vacations for retirees, war veterans and people in myriad other categories deemed "socially vulnerable" by the Soviet Union. Both supporters and opponents say the bill represents the most far-reaching attack on Soviet-style social entitlements since the fall of communism in 1991, and it is expected to win final approval this week in the lower house of parliament.
But the proposal launched by Putin as the first major legislative initiative since his landslide reelection victory in March has generated unexpected controversy, even among the pro-Kremlin parliamentary majority and generally supportive governors. His support has fallen to less than 50 percent in one benchmark public opinion poll for the first time since he became president in 2000.
"Putin is losing his rating, but he is intentionally sacrificing it," said Vyacheslav Nikonov, a political consultant for the president's party, United Russia. "He considers himself popular enough" to push through an unpopular reform. "Giving up the socialist, the communist economy is an important part of the agenda," he said.
In recent weeks, thousands of protesters have gathered in Moscow to rally against the law that provides money in lieu of benefits, waving placards calling the measure, among other things, "social genocide." Opposition to the measure has united an unlikely political coalition of Communists, Western-oriented democrats, aging World War II veterans, victims of Stalinist repression and workers involved in the cleanup of the Chernobyl nuclear disaster who were exposed to radiation.
Ten regional governors, many of them supporters of United Russia, also protested in a joint letter to the Kremlin. Such protests have become increasingly rare as Putin has reconsolidated power during his presidency. The governors complained of the burden on the regions that the cash payments decreed by the Moscow authorities would impose. A recent survey by the Yuri Levada Analytical Center, a leading independent polling group here, found that 55 percent of Russians surveyed were against the measure, while 35 percent were in favor.
"The public believes the state will deceive us, it's cheating, they are going to rob us again," said Igor Bunin, who heads the Center for Political Technologies, a Moscow research group.
But he said the plunge in the president's ratings would not hinder Putin's ability to do as he likes after four years of working to eliminate meaningful political opposition. "This is all controlled by the Kremlin," Bunin said. "The government has political control over the entire system, no parties to oppose it, no real opposition in parliament."
Nikonov said the consequences might be more serious than Putin and his advisers anticipate if Russia's notoriously inefficient bureaucracy has problems implementing the complicated changes. "It depends on whether the reform will work in the way described by the government and whether people will really get the money. If there is a real disappointment, then Putin is in very big trouble, and in my mind there is a real risk of that."
Putin has said little about the controversy. In late June, he promised that the result of the reform would be to "improve the situation" of affected Russians and make the system "more socially fair."
The measure was scheduled to go to the floor of parliament Tuesday for the crucial second reading. Politicians in the United Russia party that controls the chamber argue that they have made significant changes to the proposal, such as adding a one-year phase-in period, after considering thousands of proposed amendments.
Some details in the 1,000-page bill won't be clear until final amendments are approved, but in outline, the plan still envisions replacing the eliminated benefits with cash payments ranging from 800 rubles ($27) to 3,500 rubles ($120) a month. Not even the government can say for sure how many Russians would be affected; the Health and Social Development Ministry has estimated that 107 million people are entitled to some benefits, but some individuals may be counted in multiple categories -- as war veterans and Heroes of the Soviet Union, for example.
Supporters of the new law argue that the benefits are costly, inefficient relics of the Soviet state, often useless to many recipients, such as those in rural areas who are entitled to free public transportation and telephones but have access to neither. Critics, however, say the cash payments would be lower in value than the benefits and would be eaten up by inflation and higher prices. They also express doubt that regional governments would deliver the money in full and on time.
Despite the public stir, many analysts said they expected an easy win for the measure in the legislature, where the Kremlin controls a two-thirds majority. Final approval of the bill in the lower house, the State Duma, could come by the end of the week. Then it heads to the upper chamber, the Federation Council, and to Putin for his signature.
"It's objectively necessary in the country, and it will without a doubt improve life in the country," said Valentina Ivanova, a United Russia member of parliament and deputy chairwoman of one of the key committees shaping the bill. In an interview, Ivanova said the Duma's budget committee had considered close to 4,000 amendments to the measure over the past week and had approved about 35 percent to 40 percent of them. But she conceded that Putin and United Russia had yet to fully explain what the legislation does and why it is needed. Before it takes effect on Jan. 1, she said, pro-Putin politicians must prove that the law was significantly altered in the Duma to address the public's concerns.
But the bill's opponents and many independent analysts argue that the massive number of amendments and changes made to the bill by United Russia amount to political posturing designed to present party members as moderates open to compromise.
"United Russia is deceiving us all. They are the ones who submitted this, it was theirs and they approved it, and now they are talking about these improvements. If it's a good bill, then how can we talk about 3,000 amendments?" said Alevtina Aparina, a Communist member of parliament. "The bill was not ready, it was very poorly developed. But they decided to push it through anyway."
Critics have pointed out that the measure targeting Russia's most vulnerable citizens comes at the same time another Putin-supported measure is moving through parliament. That bill would guarantee social benefits for several million employees in the massive federal bureaucracy, entitling them to the same free transportation, medical care and low-cost vacations now being withdrawn from war veterans and others.
"The social safety net will exist securely exclusively for the corrupted bureaucracy," said Sergei Mitrokhin, a leader of the Western-oriented Yabloko party that also is opposing the bill. "The impression is that bureaucrats are a special caste securing socialism for themselves while all others will be brought to live under conditions of wild capitalism."
© 2004 The Washington Post Company