Originally appeared in Sunday's Macomb Daily.
In the mid-1980s, someone at the Coca-Cola Company had the bright idea of changing the formula of the nation's most popular soft drink. In one of the biggest public relations debacles of all time, the company's effort to convince Americans to switch to New Coke fell flat on its face. As it turned out, people liked the taste of Classic Coke just fine.
The lesson here is obvious: You don't mess with success.
The same lesson applies in the case of retirement security. Seventy-five years ago this month, President Roosevelt signed the Social Security Act. By any yardstick, Social Security has been the most successful domestic program in our nation's history, lifting millions of seniors out of poverty. Through good times and bad, American workers and their families have been able to rely on Social Security to provide guaranteed protection against the loss of earnings due to retirement, disability, or death.
Yet every few years, some politicians in Washington decide that Social Security needs to be dismantled and privatized. The last person to try that was President Bush, who, in 2005, proposed cutting traditional Social Security benefits and diverting substantial sums from the Social Security trust funds into private accounts. Democrats fought the Bush plan with everything we had, but the effort to turn back privatization wasn't truly won until Americans themselves came forward and demanded that Social Security be protected. Privatization turned out to be the New Coke of retirement plans.
Had President Bush's dream of replacing Social Security with private accounts succeeded, millions of Americans would have been left exposed to even greater losses on Wall Street during the economic collapse at the end of President Bush's term. Over the last 18 months of the Bush presidency, the stock market (as measured by the S&P 500) lost nearly half its value. Trillions of dollars of Americans' retirement savings were wiped out.
Retirement security is often compared to a three-legged stool supported by Social Security, employer-provided pension funds, and private savings. While the stock market has regained some ground, most Americans' 401(k) account balances are still a long way from recovery, and many traditional pension plans suffered huge losses as well. Imagine how much worse things would be if we had listened to President Bush and gambled what's left of Americans' retirement security by cutting traditional Social Security benefits and diverting Social Security funds to Wall Street.
The amazing thing is that some Republicans in Congress are back at it, once again pushing for changes to Social Security that would cut benefits and divert money into private investment accounts. Privatization was a bad idea five years ago, and it's still the wrong way to go today.
For three-quarters of a century, Social Security has been the foundation of a secure retirement in America. Rather than dismantle it, we should work to strengthen the program for the next 75 years. You don't mess with success.