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Bush's `ownership society' envisions better citizens with better lives

WASHINGTON—Franklin Roosevelt had his New Deal, John F. Kennedy his New Frontier and Lyndon Johnson his Great Society. Now comes President Bush, using his State of the Union address Wednesday to outline his vision of an "ownership society."

What's that? Where did it come from?

The central idea, uniting Bush's proposals from health care to retirement security, is that Americans will have better lives and be better citizens if they have more control over their financial futures. He'd help them do that by providing new incentives for savings and investment. That would help them shift toward self-reliance rather than dependence on federal programs such as Social Security and Medicare.

He might be right, if he can get it all through Congress and it works the way he hopes. Sociologists note that people who own homes or have savings are healthier, enjoy more secure marriages, have children who do better in school, and are more involved in their communities. (They also are more likely to be Republicans, a fact not lost on Bush.)

"They're just better off," said Michael Sherraden, a sociologist and the director of the Center for Social Development at Washington University in St. Louis. His work has influenced debate here and abroad on the benefits of ownership.

Yet the president's proposals wouldn't necessarily benefit everyone. To restrain costs, he may be forced to couple his pitch for new Social Security investment accounts, for example, with cuts in now-promised pension benefits. Some projections show that combination could leave many people with less money than they'd receive under the current system.

"The `ownership society' transfers risk and responsibility away from the government and onto the shoulders of American families," said Judd Legum of the Center for American Progress, a liberal Washington research center.

Though Bush is the first president to use the theme of ownership as the guiding principle for his domestic agenda, its intellectual heritage traces back through Thomas Jefferson, English essayist John Locke, theologian Thomas Aquinas and even Aristotle, the ancient Greek philosopher.

In one essay on politics, Aristotle wrote that "what belongs in common to the most people is accorded the least care. They take thought for their own things above all."

The modern era moved away from that principle as a guideline for governing. Roosevelt focused on getting people enough money so they could eat, an urgent need in the Great Depression. Johnson, too, focused on getting cash to the poor, not on helping them save it.

"There was a utopian view in the past that government could fix all of our problems, that the way to get closer to societal bliss was to cede ownership and authority to government. That hasn't worked," said Kevin Hassett, an economist at the American Enterprise Institute, a conservative research center.

Even many Democrats have moved away from New Deal-Great Society thinking in recent years. President Carter began systematic deregulation of airlines, trucking and energy. President Clinton signed legislation ending modern welfare. Government increasingly has created tax incentives to foster ownership.

The tax deduction for interest paid on home mortgages has helped millions of people buy homes. Tax-sheltered 401(k) accounts have helped many Americans save for retirement. Similarly, tax-sheltered "529" plans (named for the tax-code section that created them) help people save for college. Two years ago the government created Health Savings Accounts, which allow people—and their employers—to set up tax-sheltered cash accounts for health care.

But these steps toward a state-sponsored "ownership society" haven't much reached the poor or lower middle class. During his re-election campaign, Bush boasted that his policies had helped boost homeownership, especially among minorities. But a 2004 study found that 90 percent of tax breaks to foster ownership of homes or savings went to households with incomes of $50,000 or more.

"We already have government involved in assisting people with asset accumulation. But only the top half," said Sherraden, the sociologist. "Owning assets is really good for people. It would be a good idea if it were extended to everyone."

Sherraden recently briefed the Chinese government on the virtues of helping the poor amass wealth. He also worked with the British government on a program starting this spring that will give a personal retirement account to everyone at birth, projected to reach as much as $20,000 by the person's 18th birthday.

Bush hasn't endorsed that approach, but he does suggest a future in which the poor as well as the better off could amass wealth in homes, in stocks or bonds bought with their Social Security taxes and in tax-sheltered savings accounts for education or health care.

Not coincidentally, that also could help build a new generation of Republicans. White House political guru Karl Rove has long believed that those with financial stakes in the country, the so-called investor class, are more likely to share his party's values—and building an enduring Republican majority is his dream.

Simply by proposing these ideas, Bush could help Republicans convey their interest in helping the poor. Republican strategist Frank Luntz said poor people were turned off by the phrase "ownership society" because "they see it as something for wealthier people. Middle-class and working-class Americans aspire to ownership, but aren't sure they can make it."

But adding the word "opportunity" makes the idea seem more open to everyone, Luntz said, and that could be a political winner for Republicans.

"If Republicans are on the side of `opportunity of ownership' and Democrats are seen as opposing it, Republicans will be seen as the party promoting the American dream," Luntz said. "It is an incredibly powerful framing device for how people want to view their lives and their futures."

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(c) 2005, Knight Ridder/Tribune Information Services.

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