Decision Points

by George W. Bush

  “I just don’t know,” I said. “I do know that we have a choice to make in America, and that is to treat people with tolerance and respect and dignity.” I then expressed my conviction that marriage is between a man and a woman, and said the law should reflect that time-honored truth.

  Kerry, who also opposed same-sex marriage, began his answer, “We’re all God’s children, Bob, and I think if you were to talk to Dick Cheney’s daughter, who is a lesbian, she would tell you that she’s being who she was, she’s being who she was born as.”

  I glanced at Laura, Barbara, and Jenna in the front row. I could see the shock on their faces. Karen Hughes later told me she heard audible gasps. There is an unwritten rule in American politics that a candidate’s children are off-limits. For John Kerry to raise my running mate’s daughter’s sexuality in a nationally televised debate was appalling.

  It was not unprecedented. In the vice presidential debate a week earlier, Kerry’s running mate, North Carolina Senator John Edwards, also found a way to bring up the issue. One reference might have been an accident. Two was a plot. Kerry and Edwards were hoping to peel off conservative voters who objected to Dick’s daughter’s orientation. Instead, they came across looking cynical and mean. Lynne Cheney spoke for a lot of us when she called it a “cheap and tawdry political trick.”

  In 2000, our October Surprise had come in the form of the DUI revelation. In 2004, it came from Osama bin Laden. On October 29, the al Qaeda leader released a videotape threatening Americans with “another Manhattan” and mocking my response to 9/11 in the Florida classroom. It sounded like he was plagiarizing Michael Moore. “Americans will not be intimidated or influenced by an enemy of our country,” I said. John Kerry made a similar statement of resolve.

  The final election day of my political career, November 2, 2004, began aboard Marine One, on a midnight flight from Dallas to the ranch. We had just finished an emotional rally with eight thousand supporters at Southern Methodist University, Laura’s alma mater—my seventh stop on a daylong, 2,500-mile blitz across the country.

  Laura, Barbara, Jenna, and I were up at dawn the next day. We eagerly cast our ballots at the Crawford firehouse, four solid votes in the Bush-Cheney column. “I trust the judgment of the American people,” I told the assembled reporters. “My hope, of course, is that this election ends tonight.”

  I checked in with brother Jeb. “Florida is looking good, George,” the governor said.

  Then I spoke to Karl. He was a little worried about Ohio, so off we went for my twentieth campaign stop in the Buckeye State. After thanking the volunteers and working a phone bank in Columbus, we loaded up for the flight to D.C.

  As the plane descended toward Andrews Air Force Base, Karl came to the front cabin. The first round of exit polls had arrived.

  “They’re dreadful,” he said.

  I felt like he had just punched me in the stomach. I was down more than twenty points in the battleground state of Pennsylvania. Rock-solid Republican states like Mississippi and South Carolina were too close to call. If the numbers were right, I would suffer a landslide defeat.

  I walked from the airplane to Marine One in a daze. The ten-minute flight to the White House felt like hours. Finally the wheels of the chopper hit the South Lawn. The press corps swarmed to get a good shot for the evening news. Karen Hughes had good advice: “Everybody smile!”

  Exiting Marine One on Election Day 2004. We’d just received exit polls showing I would lose badly. White House/Paul Morse

  I went upstairs to the residence and moped around the Treaty Room. I just couldn’t believe it. After all the hard work of the past four years, and all the grueling months on the campaign trail, I was going to be voted out of office decisively. I knew life would go on, as it had for Dad. But the rejection was going to sting.

  Before long, Karl called. He had been crunching the numbers and was convinced that the methodology was flawed. I felt relieved and angry at the same time. I worried that the bogus numbers would demoralize our supporters and depress turnout in time zones where the polling places were still open. We were thinking the same thing: Here we go again.

  For the second time in four years, Karl Rove disproved the exit polls. My close friends Don Evans and Brad Freeman look on and Andy works the phones in the State Dining Room. White House/Eric Draper

  At 8:00 p.m., the polls in Florida closed. As Jeb predicted that morning, the early returns looked promising. The exit poll results in South Carolina and Mississippi were quickly contradicted by solid victories in both states. The rest of the East Coast came in as expected. The outcome would turn on four states: Iowa, New Mexico, Nevada, and Ohio. Ken Mehlman, my brilliant campaign manager who had organized a historic effort to turn out the vote, was confident we had won all four states. Each had been called in our favor by at least one news network. But after the fiasco of 2000, no network wanted to be the first to put me over the top.

  The focus was Ohio, with its 20 electoral votes. I held a solid lead of more than 120,000 votes. The clock struck midnight, one o’clock, two o’clock. At around 2:45, I took a phone call from Tony Blair. He told me he had gone to bed in London thinking I had lost and was prepared to deal with President Kerry. “Not only did you win, George,” he said, “you got more votes than any president in history.”

  “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 a
genda 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.

  On April 28, I called a primetime press conference to lay out a specific proposal. The plan I embraced was the brainchild of a Democrat, Robert Pozen. His proposal, known as progressive indexing, set benefits to grow fastest for the poorest Americans and slowest for the wealthiest. There would be a sliding scale for everyone in between. By changing the benefit growth formula, the plan would wipe out the vast majority of the Social Security shortfall. In addition, all Americans would have the opportunity to earn higher returns through personal retirement accounts.

  I hoped both sides would embrace the proposal. Republicans would be pleased that we could vastly improve the budget outlook without raising taxes. Democrats should have been pleased by a reform that saved Social Security, the crown jewel of the New Deal, by offering the greatest benefits to the poor, minorities, and the working class—the constituents they claimed to represent.

  My legislative team***** pushed the plan hard, but it received virtually no support. Democratic leaders in the House and Senate alleged I wanted to “privatize” Social Security. That was obviously poll-tested language designed to scare people. It wasn’t true. My plan saved Social Security, modernized Social Security, and gave Americans the opportunity to own a piece of their Social Security. It did not privatize Social Security. I sensed there was something broader behind the Democrats’ opposition. National Economic Council Director Al Hubbard told me about a meeting he’d had on Capitol Hill. “I’d like to be helpful on this,” one senior Democratic senator told him, “but our leaders have made clear we’re not supposed to cooperate.”

  The rigid Democratic opposition on Social Security came in stark contrast to the bipartisanship I had been able to forge on No Child Left Behind and during my years in Texas. I was disappointed by the change, and I’ve often thought about why it occurred. I think there were some on the other side of the aisle who never got over the 2000 election and were determined not to cooperate with me. Others resented that I had campaigned against Democratic incumbents in 2002 and 2004, helping Republican candidates unseat Democratic icons like Senator Max Cleland of Georgia and Senate Majority Leader Tom Daschle.

  No doubt I bear some of the responsibility as well. I don’t regret campaigning for fellow Republicans. I had always made clear that I intended to increase our party’s strength in Washington. While I was willing to fine-tune legislation in response to Democratic concerns, I would not compromise my principles, which was what some seemed to expect in return for cooperation. On Social Security, I may have misread the electoral mandate by pushing for an issue on which there had been little bipartisan agreement in the first place. Whatever the cause, the breakdown in bipartisanship was b
ad for my administration and bad for the country, too.

  With no Democrats on board, I needed strong Republican backing to get a Social Security bill through Congress. I didn’t have it. Many younger Republicans, such as Congressman Paul Ryan of Wisconsin, supported reform. But few in Congress were willing to address such a contentious issue.

  The collapse of Social Security reform is one of the greatest disappointments of my presidency. Despite our efforts, the government ended up doing exactly what I had warned against: We kicked the problem down the road to the next generation. In retrospect, I’m not sure what I could have done differently.

  I made the case for reform as widely and persuasively as I could. I tried hard to reach across the aisle and made a Democratic economist’s proposal the crux of my plan. The failure of Social Security reform shows the limits of the president’s power. If Congress is determined not to act, there is only so much a president can do.

  Inaction had a cost. In the five years since I proposed reform, the Social Security crisis has grown more acute. The projected bankruptcy date has moved from 2042 to 2037. The shortfall in Social Security—the cost of fixing the problem—has grown more than $2 trillion since I raised the issue in 2005. That is more than we spent on the war in Iraq, Medicare modernization, and the Troubled Asset Relief Program combined. For anyone concerned about the deficits facing future generations, the failure to reform Social Security ranks among the most expensive missed opportunities of modern times.

  She was standing on the doorstep, alone in the rain. She looked tired and scared. A few days earlier, Paula Rendón had said goodbye to her family in Mexico and boarded a bus bound for Houston. She arrived with no money and no friends. All she had was an address, 5525 Briar Drive, and the names of her new employers, George and Barbara Bush.