Premature announcement of Social Security reform is soberly acknowledged at the White House as Ronald Reagan's first unadorned blunder as president, but it goes unrecognized as a display of traditional Republican masochism.
Although something close the Reagan reforms will be necessary to save Social Security, the White House did almost nothing right in exposing them to public view. The too few who saw the program in advance failed to perceive how Democrats would help build a political firestorm.
All that is understood belatedly by Reagan's senior advisers. What they do not fully comprehend is how the Social Security fiasco follows a historical syndrome: Republicans seeking to alleviate national problems through pain and suffering, only to end up wounding themselves to the benefit of Democrats.
Those wounds were deeply felt by Republican lawmakers leaving Wshington to spend the Memorial Day recess in their home districts. The White House had managed to tie the dread prospect of lower Social Security benefits to the Reagan tax cut. Even ardent Reaganite members of Congress were wondering whether they could wholeheartedly support the Reagan program any longer.
The reasons for such poor political timing in unveiling a long-range reform program were twofold: First, Democratic members of the House Ways and Means Committee prodded the White House for a Social Security plan, promising they would not take political advantage of the new proposal; second, the administration's economic policy-makers wanted to impress sickly financial markets with their deficit-slashing courage.
The first reason impelled Richard Schweiker, secretary of Health and Human Services, who drafted the plan; the second reason moved budget director David Stockman, who strongly supported it. What soon would be known as Schweiker's folly arrived at the White House on Saturday, May 9, two days after Reagan's budget victory in the House had stirred pretensions of omnipotence and infallibility.
Chief of Staff James Baker was not present. Presidential counselor Edwin Meese was busy, gave the Social Security scheme a cursory glance and scheduled it for a Cabinet Council session on Monday, May 11. The White House staffers whose alarm bells might have range, congressional lobbyist Max Friedersdorf and political aid Lyn Nofziger, were not alerted. lNor were senior Republicans in Congress
When Baker returned on Monday for the Cabinet Council meeting, his alarm bell did go off--but not sufficiently to stop the programs. At the Cabinet Council session, President Reagan enthusiastically endorsed a reform he long had felt necessary. The only precaution was to keep Reagan himself pubicly at arm's length from his new program.
As promised, Democratic Ways and Means members who had solicited the president's ideas did not attack them. But to believe that their example would be followed by Speaker Thomas P. O'Neil and House Majority Leader Jim Wright revealed unsuspected political naivete within Reagan's inner circle. Eager to retaliate after their beating on the budget, the Democratic leaders assaulted the Reagan plan without mercy.
Poor coordination, bad judgment and even hubris are acknowledged at the White House. Less well understood is the more serious error of seeking to appease bond traders by inflicting pain and suffering on the nation. Dr. Alan Greenspan, a Reagan outside economic adviser with powerful acolytes at the White House, helped build market skepticism by forecasting failure for the Reagan program. To override that skepticism, he urged drastic reform of Social Security.
Neither Schweiker nor Stockman thought to consult another outside adviser: Prof. Arthur Laffer of the University of Southern California. Nearly a decade ago, Laffer devised a Social Security plan that would penalize early retirements without the political self-damage of the Reagan program. Nobody over the age of 55 when the Laffer program was announced would be affected. Long-term gain would be achieved without short-term suffering.
Fundamentally, however, Laffer believes the Social Security system can be restored to health only through economic growth encouraged by the Reagan tax rate cuts. Laffer, a pioneer in promoting such a program, is never consulted by the White House; Greenspan, who is consulted regularly, never has accepted the president's tax program.
There is one further lesson that may be missed at the White House. While everybody there mourns the political fallout, it may not be noticed that the latest exhibition of Republican masochism had no effect whatever on the bond traders it was intened to impress so profoundly.