One Sunday this past November, President Bush's chief strategist Karl Rove went on the talk show circuit to discuss the possibility that 2004 would be depicted by historians as being a realigning election.  A little over three months later, with the nation fixated on Social Security reform, his opinions seem remarkably prescient.

According to Wikipedia:

'[A realigning election is one] in which geographic bases of power for each of the two parties [are] significantly altered, resulting in a new political power structure and status quo. It is generally believed that a realigning election happens only after a shift in partisan preferences, though not necessarily policy preferences, among the electorate.' 

Some of the more notable of such elections occurred in 1800 (transfer of power from the Federalists to the Democratic—Republicans), 1824 (split of the Democratic—Republicans), 1860 (creation of the Republican Party), 1932 (creation of the 'New Deal' Democrats), and, most recently, Ronald Reagan's revival of the Republican Party in 1980.

Given this, it is quite likely that the significance of the 2004 elections, though continually being downplayed in front of the cameras by the usual suspects, in no way has been lost upon the Democratic Party leadership and its members.  In fact, it appears from their actions that the preservation of Social Security in its current form has become essential to not only preventing this realignment, but preserving their party's very existence.

To understand this nexus, it is important to recognize the realigning magnitude of the 1932 elections as the Democratic Party and our nation were thoroughly transformed by Franklin Delano Roosevelt's New Deal.  This began decades of Democratic control of the White House as well as the Congress while the Republican Party languished.

Now, 72 years later —— and coincidentally following the first campaign period wherein a sitting president won a re—election bid while increasing his party's position in both chambers of Congress since FDR did it in 1936 —— a Republican president with a Republican Congress is proposing a radical change to the very program whose passage started this same party's decline seven decades earlier. 

Unfortunately (for them), this legislative battle is coming at the worst possible time for the Democrats, who have been having a serious internal struggle for the past ten years, between their left—leaning members who are still clinging to New Deal ideologies, and the more moderate wing founded by former President Clinton and the Democratic Leadership Council. 

What this sets up is a situation where history might repeat itself in a fashion that is not a good omen for the Democrats, for the last time they had such a power struggle —— the 1824 elections —— it began a division of the Democratic—Republicans into the two parties we have today.  By 1860, this separation culminated in the rise of the Republican Party under Abraham Lincoln, leading to decades of Republican political dominance.

How does this historical schism foreshadow what is happening today?  Well, the Democratic Party, since losing the Congress in 1994, has been struggling with its identity almost like Norman Bates.  Are we liberals?  Are we moderates?  Are we hawks?  Are we doves?  Do we like taxes?  Do we hate taxes?  Do we take showers?  Do we take baths?  Mother?  Mother? 

Of course, as the psychiatrist tells us at the conclusion of Psycho, such a condition always ends in a battle between the two personalities.  And, with the election of Howard Dean as the party's National Committee Chairman, it should be infinitely clear that, for the time being, the New Deal Democratic wing of the party prevailed.

Though this might appear foolhardy, given the rightward shift of the nation for the past 24 years, it must be understood that the Democratic Party is in more than just a fight to win back the Congress and the White House.  Much like 1824, it is in a battle for its very survival.  And, this time, the center of the storm is likely to be Social Security,  it's crowning achievement.

Of additional importance is the reality that, since its inception, all legislative changes to Social Security have either expanded the base of its recipients, their benefits, or the scope of their receipts. The only exception has been changing the taxable status of benefits.  Any Republican—sponsored change to this publicly perceived Democratic program which acts to reduce or delay guaranteed benefits, while increasing the individual's control over his current contributions and future receipts, will be seen historically as the beginning of the end of the New Deal.  

This explains why the Democratic response has been quite unified and singularly obstructionist.  On the one hand, they're all saying that there is no Social Security crisis, including moderates like Evan Bayh (D—Indiana), a high ranking member of the Democratic Leadership Council, who in the past four years could be counted on to be one of the more reasonable voices in such a debate.

On the other hand, any problem that the Democrats have acceded does exist with this entitlement program can easily be resolved in their view by either raising the current income threshold for payroll taxes, or not extending the 2003 tax cuts on the wealthiest one percent of wage earners.  Of course, both options intentionally represent New Deal solutions to a New Deal program, for the expressed purpose of convincing the electorate that such dogma still has merit even though it is no longer new and never was a good deal.

In the end, the battle lines are certainly not surprising.  However, if Social Security reform is indeed accomplished, and is followed by an expansion of the Republican Congressional majority in 2006 with continued Republican control of the White House two years later, the 2004 elections will be historically portrayed as almost the exact opposite of those that occurred in 1932 with similarly diametric consequences.

Rove knows whereof he speaks.

Noel Sheppard is an economist and writer residing in Northern California.  He welcomes your comments at slep@danvillebc.com.