David Stockman's Time Horizon
By David Henderson
“I’m just not going to spend a lot of political capital solving some other guy’s problem in 2010.”
–David Stockman, in William Greider, “The Education of David Stockman,” Atlantic, December 1981.
One of the biggest “inside politics” articles in 1981 was William Greider’s devastating cover story on Ronald Reagan’s 34-year-old director of the Office of Management and Budget, David Stockman. This came out just before I was about to move from Santa Clara University to work in the Reagan administration, and the stir it caused reduced Reagan’s running room for budget cuts.
But when I read the article, what I found most troubling about Stockman was not all the “we didn’t totally understand the numbers” emphasis that the mainstream media and the chattering class in D.C. gave it because I knew enough about government to know that it rarely understands, or even gets roughly right, all the numbers. Look, for example, at Larry Lindsey’s being fired by George W. Bush shortly after he said the cost of the 2003 Iraq war would be $100 billion to $200 billion. Many people in the White House, including OMB director Mitch Daniels, thought he had way overstated the number. Of course, we now know, and I had thought even then, that he understated it.
No, for me the troubling part about Stockman was the quote with which I began this post. He had been explaining to Greider why he had gone for almost-immediate cuts in Social Security rather than supporting a growing movement on Capitol Hill, led by Jake Pickle, a Democratic member of the House of Representatives from Texas and a protege of Lyndon Johnson. Pickle had been pushing for a more-realistic age for people to receive full Social Security benefits. At the time, the age was 65. But Stockman didn’t care about 2010. That was “some other guy’s problem.”
What was Pickle’s specific proposal? In his 1986 book, The Triumph of Politics, Stockman tells us:
The only structural change the Pickle bill proposed was raising the normal retirement age from sixty-five to sixty-eight; but not until 1990, and even then it would be phased in so gradually that the change would not become fully effective until the year 2000.
OMG! In other words, if Pickle’s bill had passed, we would now be 12 years past the point where the full-benefit age for Social Security is 68, rather than 15 years before the point at which it becomes 67.
Would the Pickle bill have passed? Here’s what Stockman writes:
The problem was that by April 1981, the helpful but extremely limited step of raising the retirement age had become everyone’s favorite Social Security reform fetish. This was true even among conservative politicians who had the guts actually to face the issue, such as Barber Conable, Bill Archer, and Bill Armstrong. All three were on the key congressional committees.
Conable was the well-respected ranking minority member of the House Ways and Means Committee. Bill Archer was one of the most respected members of House Ways and Means. Bill Armstrong was an up-and-coming Republican member of the Senate Budget Committee.
Would age reform have passed with Stockman’s opposition? Note Stockman’s use of the word “even” in front of their names. In other words, the bipartisan view was that the age needed to be raised. With “even” conservatives supporting it, it probably would have been. Just with that one change, the U.S. federal debt would likely be at least $1 trillion lower today and would, by 2027, be at least $3 trillion lower than it will be.
Incidentally, the reason we even got an increase from age 65 to 67 is that Jake Pickle insisted on it. Many people mistakenly think that the proposed reforms that came out of the Greenspan Commission in 1983 included an increase in the age. Not true. Pickle was the one who tacked it on to the “reform” bill.