The movement for economic liberty lost one of our most formidable intellectual heavyweights this week. Peter Ferrara, who spent decades advocating reforms to fundamentally reduce the power of government and expand economic freedom in retirement, health care, energy, enterprise zones, and welfare reform, died at 71.
If you’ve ever used a Health Savings Account (HSA), invested in an Enterprise Zone, or argued that young workers deserve better than the raw deal of the current Social Security system, you are walking a path Peter blazed. Peter was the “godfather” of entitlement reform, developing his first proposal for Social Security privatization as his law school thesis, which he later adapted into a 1980 Cato Institute book.
Peter wasn’t just a theorist; he was a happy warrior in the trenches of the Reagan Revolution. Serving in the White House Office of Policy Development, he helped develop the supply-side policies that broke the back of stagflation, including the original drafting of the Enterprise Zone proposal that was picked up by Jack Kemp and ultimately enacted, and the Reagan executive order requiring agencies to consider the federalism implications of their actions. He also served as Associate Deputy Attorney General in the first Bush administration.
Peter was a prolific architect of freedom, collaborating with John Goodman and Richard Rahn on the first proposal for medical savings accounts back in 1984. It was Peter’s insight that giving individuals control over their own health care dollars could be the kernel of broader reforms to create a functioning health care market.
Peter was at the Heritage Foundation when the Hillarycare fight started, until he realized that Heritage’s proposal to fight Hillary’s employer mandate with an individual mandate was a dead-end for conservatives. He left for the National Center for Policy Analysis to fight against both.
After decades of advocating for Social Security personal accounts, Peter’s work was thrust to the center of the Washington debate when President Bush made reform the centerpiece of his second term. Peter had already had his plan for large personal accounts scored by the chief actuary of Social Security in 2003 as achieving full solvency with no tax increases or benefit cuts, while paying higher benefits to retirees by harnessing the power of real market returns.
If Peter’s plan had been enacted, most Americans would be retiring far wealthier today. Unfortunately, President George W. Bush, who had campaigned on personal accounts, ignored Peter’s advice and led his public pitch for reform with benefit cuts. Public support cratered. Peter wrote the definitive after-action report explaining that the personal accounts were never the political problem.
He regrouped and kept pushing. Expanding the ambition of his plan by proposing to finance the transition to personal accounts by capping and block-granting to the states all of the means-tested federal welfare programs on the model of the 1996 welfare reform. (This would have prevented the Medicaid crisis we currently face.)
In his later years, Peter joined the Heartland Institute and became a key contributor to their efforts to debunk global warming alarmism and defend the development of fossil energy sources while continuing to beat the drum for entitlement reform.
We have lost a giant, but the blueprint he left behind remains the best way to shrink government, expand liberty, and leave millions of Americans wealthier and more secure in their retirement. Peter lived a life of consequence, and his ideas will last.
Phil Kerpen is president of American Commitment and a principal of Unleash Prosperity.
