One of the things that’s struck me about the Social Security debate is how badly our political system deals with the question of opportunity costs. The idea is simple — money and influence are finite. When we devote resources to proposal A, we can’t use those resources to address priorities B-Z. But government is terrible at grappling with complexity. It can only devote sustained attention to a few issues at a time, and those issue are invariably framed as A vs. the status quo, not A vs. B-Z.
This is the fundamental dilemma of social choice, and it works to the advantage of those in power who can set the agenda, particularly when they make a new proposal where the opportunity costs are not obvious (cutting established programs has far more obvious consequences, and is thus much harder). For example, President Bush got his first tax cut through Congress in large part because it was seen as popular. When faced with the choice of A (tax cuts) or the status quo (no tax cuts), the public generally chose A in polls. However, it turned out that when you presented them with an array of issue priorities, tax cuts weren’t very high on the list.
Here’s where public relations comes in. You simply pick a recognized problem, frame what you want to do anyway as the solution, and then construct a set of logical-sounding “reasons” to justify your decision. Even if the whole process is disingenuous, the system takes you at your word, and portrays the issue as a serious policy debate focused on the “problem” that has been selected. Allies in Congress then try to manipulate the legislative agenda to keep the debate structured around the proposal for A. Meanwhile, the heavy institutional emphasis on the “problem” in Congress and the media’s faux-objective “he said, she said” reporting style, which refuses to assess whether the “problem” is pressing or whether the “solution” solves it, obscure the opportunity costs of the proposal.
Thus, Bush strategically shifted rationales for his first tax cut, which began as a taxpayer refund and ended up as a supposed recession-fighter (see All the President’s Spin). As each rationale was presented, the Washington establishment constructed a debate about the “problem” and the “solution,” which were inevitably framed around Bush’s proposal, not all the other, more popular things that the money could have been used for.
And of course, the same thing happened with Iraq. When Bush rolled out a strategy to define Iraq as a problem that demanded immediate attention and was somehow linked to Sept. 11 (again, see ATPS), the institutions of Washington focused almost all of their attention on the reasons to go into Iraq or not – once again, A or the status quo. The massive opportunity costs of that decision for reconstruction in Afghanistan, the hunt for Al Qaeda, and other foreign policy priorities were not given serious attention. In the post-9/11 atmosphere, opponents of the invasion were inevitably going to lose to a President determined to take out a country he viewed as a threat.
That brings us to the Social Security debate. As Jonathan Chait points out in The New Republic, we’re seeing the same dynamic play out today. He writes:
The consensus among the capital’s chattering classes holds that the Social Security debate primarily concerns the program’s solvency. Therefore, the questions center around political courage, and the greatest threat is that the parties will not agree on a solution. This consensus is wrong in every particular.
By setting up the debate as a serious policy dispute over how to address Social Security’s solvency, the Washington establishment plays into Bush’s hands. They (a) present private accounts as a solution, when in fact they make Social Security’s funding problems worse, and (b) define away the question of opportunity costs by focusing attention on a “problem” that the institutions of Washington have geared up to solve. I would never deny that the funding shortfall that Social Security faces is a serious policy issue that should be addressed, but we face huge deficits over the next two decades as Bush’s tax cuts kick in and Medicare costs spiral. Is this our first priority? We don’t know because the system can’t handle the question.