Bush Wants to Break Promise of Social Security
WASHINGTON -- President Bush is proposing to erode the Social Security system by privatizing part of it, making Wall Street the big winner of a huge financial windfall.
Bush wants workers to earmark 2 percent of their Social Security payroll taxes for individual private investment accounts -- a move that would undermine funding for the 69-year-old program that was designed to provide retirees with a secure income.
The emphasis in Social Security should be on "security." Bush's plan to rely on the stock market undermines that value.
Bush has been fixated on Social Security since he first took office and has been determined to chip away at the government role. His re-election and the Republican majority in Congress have galvanized him into action.
Republicans have tried to scare young people by telling them that their Social Security checks won't be there when they become eligible to collect benefits.
Now Bush is falsely proclaiming that there is a financial "crisis" in Social Security. If he repeats that often enough, he may convince people that the program is on the rocks -- just as he successfully led the nation into war under the fallacy that Iraq had weapons of mass destruction and ties to the al-Qaida terrorist network.
Social Security will be solvent until 2042, though analysts say that more will be paid out in benefits than collected in payroll taxes, starting in 2018.
In 1983, when the program had a short-term financial problem, former President Reagan tapped Alan Greenspan, now chairman of the Federal Reserve System, to head a commission to propose a fix.
The Greenspan panel made recommendations to bolster the program, including a gradual increase on the payroll tax on employees and employers that went up to 7.65 percent in 1990.
It seems Bush is obsessed with wiping out the last vestige of the New Deal era -- a safety net that provides a guaranteed monthly government check for the elderly, the disabled, widows and orphans and other dependent children.
He has offered no new blueprint to transform Social Security except to lay down the law that there will be no payroll tax increases and there will be no change in benefits for those now receiving them. Those preconditions appear designed to improve the marketing of his proposed overhaul of the retirement system.
Analysts estimate it will take $2 trillion in transition costs to privatize the system over 10 years. The administration reportedly is sounding out Wall Street on the impact of borrowing some $2 trillion from the movers and shakers in the bond markets. And what will that do to the ballooning budget deficit?
The Great Depression and the 1929 stock market crash prompted Franklin D. Roosevelt to lay the groundwork for the Social Security program to alleviate the poverty of senior citizens at the time. The law was proposed in 1935 and enacted in 1936.
The system works. More than 99 percent of the Social Security revenues from tax collections go to pay benefits. Less than 1 percent is devoted to overhead expenses.
Anyone who remembers the 1929 Wall Street debacle knows that it would be risky business to divert our Social Security payroll taxes to play the market. There have many other market collapses since. The dot-com implosion changed the retirement plans of millions of Americans. More recently, it would be well to "think Enron."
Bush promoted privatization at his so-called two-day White House Economic Conference last week -- a misnomer if there ever was one since nearly all the attendees were cheerleading CEOs. Labor representatives were conspicuously among the uninvited.
White House press secretary Scott McClellan explained that Bush wanted to hear from the people who were "pro-growth."
Social Security is often referred to as the "third rail" in politics because it is reputed to be dangerous for lawmakers to touch it. Bush may be able to talk his party into supporting privatization, but there will be huge resistance in Congress.
Some concerned organizations are banding together to fight any change. Among them are AARP (formerly the American Association of Retired Persons,) the AFL-CIO, the National Organization of Women and others.
Previous presidents -- more in touch with workers -- upheld the Social Security system when it was threatened and made changes that always kept it intact.
Roosevelt said it was "a law that takes care of human needs."
When enacted, the law was evidence that the United States will keep the promises to the elderly and disadvantaged it made in troubled times. Bush should be stopped from breaking those promises.
Helen Thomas is a columnist for Hearst Newspapers. E-mail: helent@hearstdc.com. Copyright 2004 Hearst Newspapers.
Bush wants workers to earmark 2 percent of their Social Security payroll taxes for individual private investment accounts -- a move that would undermine funding for the 69-year-old program that was designed to provide retirees with a secure income.
The emphasis in Social Security should be on "security." Bush's plan to rely on the stock market undermines that value.
Bush has been fixated on Social Security since he first took office and has been determined to chip away at the government role. His re-election and the Republican majority in Congress have galvanized him into action.
Republicans have tried to scare young people by telling them that their Social Security checks won't be there when they become eligible to collect benefits.
Now Bush is falsely proclaiming that there is a financial "crisis" in Social Security. If he repeats that often enough, he may convince people that the program is on the rocks -- just as he successfully led the nation into war under the fallacy that Iraq had weapons of mass destruction and ties to the al-Qaida terrorist network.
Social Security will be solvent until 2042, though analysts say that more will be paid out in benefits than collected in payroll taxes, starting in 2018.
In 1983, when the program had a short-term financial problem, former President Reagan tapped Alan Greenspan, now chairman of the Federal Reserve System, to head a commission to propose a fix.
The Greenspan panel made recommendations to bolster the program, including a gradual increase on the payroll tax on employees and employers that went up to 7.65 percent in 1990.
It seems Bush is obsessed with wiping out the last vestige of the New Deal era -- a safety net that provides a guaranteed monthly government check for the elderly, the disabled, widows and orphans and other dependent children.
He has offered no new blueprint to transform Social Security except to lay down the law that there will be no payroll tax increases and there will be no change in benefits for those now receiving them. Those preconditions appear designed to improve the marketing of his proposed overhaul of the retirement system.
Analysts estimate it will take $2 trillion in transition costs to privatize the system over 10 years. The administration reportedly is sounding out Wall Street on the impact of borrowing some $2 trillion from the movers and shakers in the bond markets. And what will that do to the ballooning budget deficit?
The Great Depression and the 1929 stock market crash prompted Franklin D. Roosevelt to lay the groundwork for the Social Security program to alleviate the poverty of senior citizens at the time. The law was proposed in 1935 and enacted in 1936.
The system works. More than 99 percent of the Social Security revenues from tax collections go to pay benefits. Less than 1 percent is devoted to overhead expenses.
Anyone who remembers the 1929 Wall Street debacle knows that it would be risky business to divert our Social Security payroll taxes to play the market. There have many other market collapses since. The dot-com implosion changed the retirement plans of millions of Americans. More recently, it would be well to "think Enron."
Bush promoted privatization at his so-called two-day White House Economic Conference last week -- a misnomer if there ever was one since nearly all the attendees were cheerleading CEOs. Labor representatives were conspicuously among the uninvited.
White House press secretary Scott McClellan explained that Bush wanted to hear from the people who were "pro-growth."
Social Security is often referred to as the "third rail" in politics because it is reputed to be dangerous for lawmakers to touch it. Bush may be able to talk his party into supporting privatization, but there will be huge resistance in Congress.
Some concerned organizations are banding together to fight any change. Among them are AARP (formerly the American Association of Retired Persons,) the AFL-CIO, the National Organization of Women and others.
Previous presidents -- more in touch with workers -- upheld the Social Security system when it was threatened and made changes that always kept it intact.
Roosevelt said it was "a law that takes care of human needs."
When enacted, the law was evidence that the United States will keep the promises to the elderly and disadvantaged it made in troubled times. Bush should be stopped from breaking those promises.
Helen Thomas is a columnist for Hearst Newspapers. E-mail: helent@hearstdc.com. Copyright 2004 Hearst Newspapers.
posted by R7 | 12/27/2004 09:31:00 PM
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