“If only the Kerry campaign would recognize that,” I replied. “I haven’t been up this late since college!”
At around four o’clock, we started hearing rumors that Kerry and Edwards planned to file a lawsuit contesting the vote in Ohio. In another replay of 2000, several advisers urged me to declare victory even though the networks hadn’t called the race and my opponent had not conceded. Four years earlier, it was Jeb who wisely advised me against giving my speech in Austin. This time it was Laura. “George, you can’t go out there,” she said. “Wait until you’ve been declared the winner.”
In the White House residence on Election Night, 2004, waiting for the decision. White House/Eric Draper
At around the same time, Dan Bartlett picked up a useful piece of intelligence. Nicolle Wallace, my campaign’s communications director, had connected Dan with Kerry aide Mike McCurry. McCurry told him the senator would make the right decision if we gave him time. “Don’t press the guy,” Dan advised.
Once again, a disappointed crowd waited for a candidate who never arrived. I so wanted to give my supporters the victory party we had been denied in 2000. But it wasn’t to be. Just after 5:00 a.m., I sent Andy Card in my place. “President Bush decided to give Senator Kerry the respect of more time to reflect on the results of this election,” he said. “We are convinced that President Bush has won reelection with at least 286 electoral votes.”
At 11:02 the next morning, my personal assistant, Ashley Kavanaugh, opened the door to the Oval Office. “Mr. President,” she said, “I have Senator Kerry on the line.”
John was gracious. I told him he was a worthy opponent who had run a spirited campaign. I called Laura and hugged the small group of senior aides gathered in the Oval Office. I walked down the hallway to Dick’s office, where I gave him a hearty handshake. Dick isn’t really the hugging type.
Eventually I reached Mother and Dad on the phone. After staying up most of the night, they had slipped out of the White House early that morning and flown back to Houston without knowing the results. “Congratulations, son,” Dad said. He said it more with relief than joy. We hadn’t talked about it, but 2000 was not the only election that had been on our minds. We both remembered the pain of 1992. I could tell he was very happy I would not have to go through what he had.
After its bleak start, election night 2004 had turned into a big victory. I became the first president to win a majority of the popular vote since Dad in 1988. As in 2002, Republicans gained ground in both the House and Senate.
The day after Kerry conceded, I held a morning press conference. One of the reporters asked if I felt “more free.”
I thought about the ambitious agenda I had outlined over the past year. “Let me put it to you this way,” I said. “I earned capital in the campaign, political capital, and now I intend to spend it.”
For as long as I can remember, Social Security has been the third rail of American politics. Grab ahold of it, and you’re toast.
In 2005, I did more than touch the third rail. I hugged it. I did so for one reason: It is unfair to make a generation of young people pay into a system that is going broke.
Created by Franklin Roosevelt in 1935, Social Security is a pay-as-you-go system. The checks collected by retirees are financed by payroll taxes paid by today’s workers. The system worked fine when there were forty workers for every beneficiary, as there were in 1935. But over time, demographics changed. Life expectancy rose. The birthrate fell. As a result, by 2005 there were only three workers paying into the Social Security system for every beneficiary taking money out. By the time a young person starting work in the first decade of the twenty-first century retires, the ratio will be two to one.
To compound the problem, Congress had set Social Security benefits to rise faster than inflation. Starting in 2018, Social Security was projected to take in less money than it paid out. The shortfall would increase every year, until the system hit bankruptcy in 2042. The year 2042 sounded a long way off, until I did the math. That was when my daughters, born in 1981, would be approaching retirement.
For someone looking to take on big issues, it didn’t get much bigger than reforming Social Security. I decided there was no better time to launch the effort than when I was fresh off reelection.
I started by setting three principles for reform. First, nothing would change for seniors or people near retirement. Second, I would seek to make Social Security solvent without raising payroll taxes, which had already expanded from about 2 percent to 12 percent. Third, younger workers should have the option of earning a better return by investing part of their Social Security taxes in a personal retirement account.
Personal retirement accounts would be new to Social Security, but most Americans were familiar with the concept. Like 401(k) accounts, they could be invested in a safe mix of stock and bond funds, which would grow over time and benefit from the power of compound interest. The accounts would be managed by reputable financial institutions charging low fees, and there would be prohibitions against withdrawing the money before retirement. Even at a conservative rate of return of 3 percent, an account holder’s money would double every twenty-four years. By contrast, Social Security’s return of 1.2 percent would take sixty years to double. Unlike Social Security benefits, personal retirement accounts would be an asset owned by individual workers, not the government, and could be passed from one generation to the next.
In early 2005, I sat down with Republican congressional leaders to talk through our legislative strategy. I told them modernizing Social Security would be my first priority. The reaction was lukewarm, at best.
“Mr. President,” one leader said, “this is not a popular issue. Taking on Social Security will cost us seats.”
“No,” I shot back, “failing to tackle this issue will cost us seats.”
It was clear they were thinking about the two-year election cycle of Capitol Hill. I was thinking about the responsibility of a president to lead on issues affecting the long-term prospects of the country. I reminded them that I had campaigned on this issue twice, and the problem was only going to get worse. By solving it, we would do the country a great service. And ultimately, good policy makes for good politics.
“If you lead, we’ll be behind you,” one House leader said, “but we’ll be way behind you.”
The meeting with congressional Republicans showed what an uphill climb I had on Social Security. I decided to press ahead anyway. When I looked back on my presidency, I didn’t want to say I had dodged a big issue.
“Social Security was a great moral success of the twentieth century, and we must honor its great purposes in this new century,” I said in my 2005 State of the Union address. “The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security.”
With Mother campaigning for Social Secuirty reform. White House/Paul Morse
The next day, I embarked on a series of trips to raise awareness about Social Security’s problems and rally the American people to insist on change. I gave speeches, convened town halls, and even held an event with my favorite Social Security beneficiary, Mother. “I’m here because I’m worried about our seventeen grandchildren, and so is my husband,” she said. “They will get no Social Security.”
One of my most memorable trips was to a Nissan auto-manufacturing plant in Canton, Mississippi. Many in the audience were African American workers. I asked how many had money invested in a 401(k). Almost every hand in the room shot up. I loved the idea of people who had not traditionally owned assets having a nest egg they could call their own. I also thought about how much more was possible. Social Security was especially unfair to African Americans. Because their life expectancy was shorter, black workers who spent a lifetime paying into Social Security received an average of $21,000 less in benefits than whites of comparable income levels. Personal accounts, which could be passed along to the next generation, would go a long way toward reducing that disparity.