The low-key “legislative exchange” group has been in the news a lot, promoting right-wing bills in state governments. But it seeks a role on the national level as well. One of its longtime targets is one of the biggest: Social Security.
The American Legislative Exchange Council is taking some flack – and burnishing its conservative credentials – due to the remarkable success of some controversial initiatives. Model bills that have made it onto the books in multiple states thanks to ALEC members of those state’s legislatures include laws mandating stringent new voter ID rules and “stand your ground” laws that helped create the poisoned atmosphere accompanying the tragic gunning down of Trayvon Martin.
What’s sometimes overlooked is that part of ALEC’s goal is for its work at the state level to have a cumulative effect – leading, wherever possible, to legal changes in Congress as well.
One of ALEC’s oldest and most consistently pursued causes has been the dismantlement of public-employee pension systems. It won a major victory in this fight in May 2000, when the Florida Sate Legislature passed a bill setting up a 401(k)-type savings plan alongside the traditional, defined benefit pension plan for state workers. The new law allowed state employees to opt out of the existing system and move their assets to a new Public Employee Optional Retirement Program (PEORP). It was the product of an intense fight that brought more lobbyists – mostly from financial services vendors – to Tallahassee than the state capital had ever seen before.
Then-Gov. Jeb Bush was an active supporter of the bill. A year earlier, his brother, then-Texas Gov. George W. Bush, had agitated for a similar law in his state, but it died in the legislature. By the time Jeb signed the new savings plan into law in Florida, his brother was campaigning for president, advocating a private-accounts system for Social Security.
I wrote about the PEORP fight at the time in Plan Sponsor magazine, and quickly discovered that the connection between ALEC’s efforts at the state level and the Bush campaign was anything but casual. The PEORP
could have positive consequences for policymakers in Congress and on the campaign trail who want to involve more people in DC-like plans, including Bush’s proposal to let people set aside some of their Social Security money in something like a DC plan,
a spokesperson for the conservative National Taxpayers Union told me. As ALEC continued its efforts at the state level, the feedback effect could work both ways, Americans for Tax Reform’s Grover Norquist added:
Private accounts have not turned out to be a scary thing for people to talk about. I think this will increase the speed at which other states imitate Florida. Not only will they have the Florida example, but other governors can say, ‘I know what Bush is doing on Social Security, and I want to give you the same option at the state level.’
As it happened, the PEORP failed to attract much interest from Florida state workers in its first few years, arriving as it did in the wake of the dot.com bust and recession. Norquist predicted at the time (December 2000) that at least two more states – Virginia and Texas – would consider alternative retirement schemes for their workers in the next year. It didn’t happen. But following the Tea Party election of 2010, Republican governors in several states began pushing ALEC’s pension agenda again.
In New Jersey, Gov. Chris Christie and conservative lawmkers succeeded in pushing some part-time state workers into a 401(k)-like plan. Last year, in Wisconsin, Gov. Scott Walker and his Republican colleagues in the state legislature pushed through a budget act setting up a committee to study changing the state retirement system One proposal the committee considered was to allow workers to opt out of the retirement plan – quite similar to the ALEC model bill that got over in Florida more than a decade earlier.
ALEC’s objective is not just to force through conservative legislation on the state level, but by winning victories there, to set up a feedback loop that results in change at the federal level and then more changes at the state level, and so on. Efforts like Walker’s and Christie’s, if they spawn similar initiatives, help create momentum for the Social Security privatization proposals that House Budget Committee chair Paul Ryan has been pushing as part of his “Road Map for America’s Future” – a blueprint that owes a good deal to ALEC’s pension model as well.