Moving toward an 'ownership society'

Ronald Reagan was a hero to the conservative movement. He cut taxes and stood up to the Russians. But like Moses, Reagan was never able to lead his followers to the promised land -- scaling back the welfare state. I have a hunch that President Bush, if he wins reelection, might succeed where Reagan failed. If he does manage to shrink the government safety net, he may do it under the cheerful slogan of the ''ownership society."

Follow the logic. In his first term, Bush cut taxes but not spending. The result: a ballooning budget deficit. The deficit will reach $420 billion this year and possibly a cumulative $5 trillion over the next decade. Big deficits are tolerable in the short run. Longer term, pressure from financial markets will demand that they be closed. If we are not going to raise taxes, a good bet with the Republicans in charge, we will have to cut spending, especially spending on Social Security and Medicare, the two giant entitlement programs.

Enter the ''ownership society." The president described the concept in his acceptance speech at the Republican convention. Bush provided few details but he did lay out the philosophical underpinnings of what he had in mind.

''We seek to provide not just a government program but a path," said Bush, ''a path to greater opportunity, more freedom, and more control over your own life." He went on to say that in an ownership society, ''more people will own their healthcare plans and have the confidence of owning a piece of their retirement." He called once again for the establishment of individual accounts within the Social Security system.

If you want a model of what an ownership society might entail, look no further than the private sector. On the retirement side, traditional pension plans have given way to 401(k) plans. In the former, the company is responsible for providing a guaranteed level of benefits. In the latter, the firm makes a fixed contribution and the employee is responsible for everything else.

In healthcare, the world is moving in the same direction. Companies are setting up personal accounts that give workers more say over how their dollars are spent. Down the road, say consultants, health insurance could work much the way a 401(k) plan does. The firm will make a fixed payment toward medical care and the employee will figure out what to do with the money.

In the corporate sector, the move toward an ownership society is certainly empowering. But if you think that's the reason companies are changing their policies, you probably believe in the tooth fairy. The goal here is limiting the employers' exposure to risk -- specifically the risk of falling stock prices and rising medical costs -- and putting that risk on our shoulders.

Jacob Hacker, a Yale political science professor, calls the transformation, ''the great risk shift."

''Say this for Bush's vision of an ownership society," Hacker wrote recently in the Globe. ''It is consistent with the direction in which the American economy has been heading."

What would an ownership society look like for government programs? It is hard to know exactly, but it is possible to make some educated guesses. For Social Security, it might include private accounts invested in stocks combined with cuts in existing benefits -- sugar to make the medicine go down more easily. Creating private accounts alone does nothing to cut Washington's financial obligations. For Medicare, a system of personal savings accounts -- perhaps funded with fixed payments from the federal government -- would accomplish the same thing: push more risk onto the shoulders of beneficiaries while limiting Washington's exposure.

Is it possible I am being too cynical here? Could the ownership society actually be something more than a thinly veiled scheme to trim the budget deficit and scale back government's role in providing economic security?

Maybe. But don't bet on it. The bottom line of the ownership society may be that in the end, each of us will be on his own.

Charles Stein is a Globe columnist. He can be reached at stein@globe.com.