President Bush is losing the fight for Social Security reform. To win, he’s got to convince the public that private accounts are less risky than his critics say, that the benefits are greater and that the costs are containable. [IMGCAP(1)]

He’s also got to convince the country that the consequences of doing nothing are serious — and that his foes are condemning future generations to higher taxes and reduced retirement benefits.

Bush probably made a mistake in last fall’s presidential campaign by not being more explicit about his plans for Social Security. Then, when he won re-election, he could have claimed a mandate to launch the “ownership society.”

Private savings accounts certainly were a part of his platform, but not a central item. There was no extended debate on the subject, and hence little public education for the fight at hand.

Of course, allowing the election to hinge on Social Security would have been risky, opening Bush up to classic Democratic demagoguery. Conceivably, he could have been defeated on account of it.

So now, the battle is joined. The selling job has begun, but it’s not going well. Democrats are lined up solidly against his basic reform idea — private accounts within Social Security — with Democratic leaders clearly hoping to do to Bush what Republicans did to President Bill Clinton over health care reform in 1994.

When “Hillarycare” went down to ignominious defeat, it helped catapult Republicans into the majority in Congress. Democrats seem to think they can pull off a similar feat now, and some Republicans fear they’re right.

Polls show that a month of campaigning for his proposal has actually cost Bush support, not gained it. The USA Today/Gallup poll showed that approval of Bush’s record on Social Security has fallen from 43 percent three weeks ago to 35 percent last week.

In January, half of Gallup’s respondents said that major changes need to be made in the next year or two. Now, 59 percent say there’s time to wait.

But even though he’s behind now, Bush can recoup. In fact, it’s rare that a president loses on his signature domestic initiative. Ronald Reagan cut and reformed taxes. Clinton raised taxes. And Bush cut them.

One point that Bush needs to make more clearly is that when Social Security does go bankrupt — in 2042 or 2052, depending on who’s estimating — current law calls for an automatic cut in benefits by 25 percent.

That’s a counter to the Democratic argument that his plan would result in a “40 percent benefit cut.” It wouldn’t. Benefit guarantees have to be cut to keep the system solvent, although there is no specific Bush proposal on how or how much. Yet the whole idea of private accounts is to protect workers against such cuts.

Bush could make the program more palatable to Democrats by ensuring that cuts in the basic guarantee would be smaller for poorer workers than for those who are better-off.

Indeed, one major difference between his approach and the Clintons’ in 1994 is that Bush is being flexible, leaving lots of details “on the table” for Congress to work out.

Probably Bush’s best argument for private accounts is that they are almost sure to earn workers better returns than they get from Social Security.

A staff study done for Senate Majority Leader Bill Frist (R-Tenn.) showed that $10,000 invested in the Social Security Trust Fund in 1988 would be worth only $11,700 today.

However, $10,000 invested in the federal employees’ Thrift Savings Plan, evenly distributed between its bond, stock and blended funds, would be worth $42,173. And that’s a period that includes two recessions.

To sell his program, Bush also ought to be making more of the fact that it is strictly voluntary. Workers who want to stick with the 1.9 percent annual return on their money (as opposed to an average of 4.9 percent in a mixed stock-bond fund) could do so.

It’s probably also nowhere near clear enough to the public that Bush’s plan calls for only a partial privatization model — up to a maximum of 4 percent of the 12.6 percent of a worker’s payroll taxes.

It would also help sell the program if Bush provided a guarantee that no one who invests in a private account would fall below a certain level of retirement income, regardless of what happens to markets.

In Chile, where private retirement accounts were established in 1981, the government guarantees an income of twice the poverty level to workers who hold private accounts for 20 years or more. In fact, the average annual return on investments there has been 10 percent, after inflation, over the past 22 years.

One of the biggest hurdles facing Bush is the transition cost of his program, which adds as much as $2 trillion to the nation’s debt in a 10-year period.

The burden could be reduced by lifting the income cap on payroll taxes, currently $90,000. To the extent that Republicans balk at this idea, Bush could tell them that this is what Margaret Thatcher did in Britain to pay for her privatization plan in 1985.

Of course, this leaves the Democrats, who seem to be more interested in defeating Bush than solving the problem of Social Security. To win some of them over, he’ll have to pose the challenge: Who are you for — your party, or your kids?