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Wild Weekend of Social Security Debate Shows Where
We Are Now
By Tucker Sutherland, editor
Jan. 17, 2005 – It was a wild weekend for the
debate on changes to the Social Security system, with the politicians
and partisan groups blasting away on radio, television and in the Sunday
newspapers. President Bush got it started with his Saturday morning
radio program that evoked the name of Franklin Roosevelt and the
Democrats blasted back all weekend. The New York Times started a new
debate by reporting that some Social Security Administration staffers
were claiming they were ordered to back the Bush plan.
Here is where we are in this battle:
First, we don’t really have a “plan” from President
Bush on how he will “reform” Social Security, other than leaked
information and his often repeated push for some type of private
investment for part of a worker’s Social Security tax. Incidentally, the
phase “strengthen Social Security” is now being used more often by
President Bush than “reform Social Security.”
Right now, the focus of the President and his
allies is to convince America that there is a severe crisis in Social
Security and dire action is required to save it.
The Democrats and their allies, such as AARP, are
saying that the President is “fabricating” a Social Security crisis, so
he can push through his private investment plan that will be worth
millions to his friends in the stock broker business.
Here are some of the statements from the
weekend.
Bush on radio:
“For 70 years, the Social Security system has
fulfilled the promise made by President Franklin Roosevelt, keeping our
elderly citizens out of poverty, while assuring younger Americans a more
secure future. Along with employer-funded pensions and personal savings,
Social Security is for millions of Americans a critical element to their
plans for a stable retirement. And for today's senior citizens and those
nearing retirement, the system is sound. But for younger workers, Social
Security is on the road to bankruptcy. And if we do not fix it now, the
system will not be able to pay the benefits promised to our children and
grandchildren.
“…Today, it's about three workers for every
beneficiary. And by the time today's workers in their mid 20s begin to
retire, there will be just over two.
“What this means is that in the year 2018, the
system will go into the red -- paying out more in benefits each year
than it receives in payroll taxes. After that, the shortfalls will grow
larger until 2042, when the whole system will be bankrupt. The total
projected shortfall is $10.4 trillion. To put that number in
perspective, $10.4 trillion is nearly twice the combined wages of every
single working American in 2004.”
For the complete text of the Bush radio address,
go to bottom of this page.
Bush Allies
Appearing on NBC's "Meet
the Press," White House counselor Dan Bartlett insisted the Social
Security crisis is real, claiming it's "a matter of math, not ideology."
Democrats Fire Back
In a "Face the Nation" interview on CBS,
Massachusetts Senator Edward Kennedy said the Bush administration "tries
to make a crisis on any political problem." He rejects the
administration's claim that there's a funding crisis for the federally
backed retirement program.
Kennedy says Social Security is totally solvent
through the year 2042, and even if nothing is done it will still provide
80 percent of the current benefits in 2075. He says the crisis is
"nonexistent," contrived only to stimulate support for the
administration's private investment plan.
Democrat allies
Former congressional Aging Committee Director
Robert Weiner issued a statement saying, "President Bush's Social
Security radio address today confirms the cry-wolf,
Granny-you're-on-your-own, Wall Street giveaway that the President wants
to make the program become. The President is exaggerating a manageable
problem when he calls it 'the coming crisis'. Social Security is not
broken, or in a looming crisis. Even if the economy stays where it is,
incomes and reserves are adequate to pay all benefits until 2052 and 80
percent of promised benefits beyond that, according to the Congressional
Budget Office," Weiner points out.
Weiner, who worked as Staff Director of the House
Aging Committee under Chairman Claude Pepper from 1976-1980 and later
worked for Congressmen Rangel, Conyers, and the Clinton White House,
said, "Congressman Pepper would roll over in his grave if he heard the
Bush Social Security proposals today. To put Grandma at risk of the
volatile stock market is an outrageous giveaway to Wall Street, who
would reap the windfalls of the plan. Even the most secure 401K's based
on the Fortune 500 have been hurt the last five years by seeing the
market go from 12,000 to 8,000 and now only to 10,600. When the market
is down, that's real food off seniors' tables. Social Security has
helped reduce poverty among the elderly by a third -- do we really want
to go back to that so that Wall Street can make hundreds of billions of
dollars in fees and bring trillions of dollars of seniors' money into
company coffers?" Weiner asks.
"Moreover, this is not a long-term problem. The
President is age-baiting when he says in his radio address that he will
not touch seniors' benefits but wants to protect 'our children and
grandchildren" from the need to 'dramatically reduce benefits' or a
'ruinous tax increase.' The reality, which he fails to mention, is that
the baby boom is a short transitional factor.
“The 'boomers' aren't booming with babies
themselves. The high birthrate of 2.9-per-family that they represent
(births from 1940-69) is followed by THEIR children having 2.1 babies
per family (1970-2000), the lowest ever, according to the National
Center for Health Statistics. After the Baby Boomers, the system goes
right back into a huge surplus for having to pay out fewer benefits. The
stressing of the system for the Boomers' generation can be solved with
one-third to one-fourth of the Bush tax cuts which primarily benefited
the wealthy," Weiner asserts. "Moreover, if the economy improves, even
this slight infusion may be unnecessary."
Finally, Weiner points out, "There is enormous
hypocrisy in President Bush's mentioning Franklin Roosevelt's advocacy
and creation of Social Security in the same breath as his own plan to
supposedly strengthen it, when what is clear is that President Bush and
the Republicans are doing everything possible to destroy this legacy of
the New Deal. If anything, Bush is 'the anti- Roosevelt'. There is no
doubt that Roosevelt would abhor the Bush proposals."
"It's the Federal Government that can't get to next
year without a deficit, thanks to President Bush's tax cuts and his Iraq
war expenses. Social Security is doing just fine for nearly fifty years
and counting. President Bush's plan would make retirees, young people,
the economy, and Social Security's financing problems worse off under a
system of private accounts. No thanks, Mr. President!" Weiner concluded.
After leaving the White House in 2001, Weiner now
is President of a Washington-based public affairs and issue strategies
consulting think tank, Robert Weiner Associates: www.weinerpublic.com
Is Social Security Administration Ordering Staff
to Support Bush Plan?
Then House Democratic Leader Nancy Pelosi released
the following statement on a report in The New York Times on Sunday that
the Bush Administration is using the Social Security Administration to
promote his plan:
"Once again, Republicans and the Bush
Administration have demonstrated that they will stop at nothing to push
their partisan political agenda. The Administration has distributed fake
video news reports and paid a conservative journalist to support its
education agenda. Now nonpartisan employees of the Social Security
Administration are being forced to engage in partisan scare tactics by
spreading false information about the future of Social Security to
create a crisis and promote the President's risky plan for private
accounts.
"That is wrong -- the Social Security
Administration must not be used to undermine Social Security, which is
crucial for helping American seniors achieve retirement security.
"The American people deserve an open and honest
debate over the future of Social Security. All they are getting from the
Bush Administration is half-truths and misinformation.
"There should be a full investigation into the
charges made by employees of the Social Security Administration and any
illegal political activities being conducted by the Social Security
Administration should immediately cease."
Then Reuters reported…
“A senior White House official said on Sunday that
career employees at the Social Security Administration would not be
asked to promote President George W. Bush's plan to create private
investment accounts.
" ‘The Social Security Administration is an
independent organization that has a duty to fulfill the obligations of
making sure that checks go out and ... the solvency of the actual system
itself,’ Dan Bartlett, a top aide to Bush, told NBC's "Meet the Press."
“Responding to a report in The New York Times that
the agency would publicize Social Security's financial problems and
promote private accounts, Bartlett said: ‘There's no expectation that
career employees would be asked to advocate on behalf of any specific
prescription for Social Security.’ “
AARP Ads Appeared in Sunday Paper
And, as was fitting for this weekend of Social
Security debate, the full-page newspaper ads by AARP opposing the
private accounts proposed by President Bush appeared in many of the
Sunday newspapers.
Text to Bush Radio Address
The following is the text of the President's radio
address to the nation Saturday, Jan. 15, 2004:
THE PRESIDENT: Good morning. This week, I met with
some of our fellow citizens from across the country to discuss one of
the great responsibilities of our nation: strengthening Social Security
for our children and grandchildren.
For 70 years, the Social Security system has
fulfilled the promise made by President Franklin Roosevelt, keeping our
elderly citizens out of poverty, while assuring younger Americans a more
secure future. Along with employer-funded pensions and personal savings,
Social Security is for millions of Americans a critical element to their
plans for a stable retirement. And for today's senior citizens and those
nearing retirement, the system is sound. But for younger workers, Social
Security is on the road to bankruptcy. And if we do not fix it now, the
system will not be able to pay the benefits promised to our children and
grandchildren.
When President Roosevelt signed the Social Security
Act in 1935, the average life expectancy was about 60 years, which meant
that most Americans would not live to become eligible for benefits, then
set at age 65.
Today, most Americans enjoy longer lives and longer
retirements. And that presents a looming challenge. Because Social
Security was created as a pay-as-you-go system, current retirees are
supported by the taxes paid by current workers. Unfortunately, the ratio
of workers to retirees is falling steadily. In the 1950s, there were
about 16 workers paying in for each person drawing out.
Today, it's about three workers for every
beneficiary. And by the time today's workers in their mid 20s begin to
retire, there will be just over two.
What this means is that in the year 2018, the
system will go into the red -- paying out more in benefits each year
than it receives in payroll taxes. After that, the shortfalls will grow
larger until 2042, when the whole system will be bankrupt. The total
projected shortfall is $10.4 trillion. To put that number in
perspective, $10.4 trillion is nearly twice the combined wages of every
single working American in 2004.
Every year we put off the coming crisis, the higher
the price our children and grandchildren will have to pay. According to
the Social Security trustees, waiting just one year adds $600 billion to
the cost of fixing Social Security. If we do not act now, government
will eventually be left with two choices: dramatically reduce benefits,
or impose a massive economically ruinous tax increase. Leaving our
children with such a mess would be a generational betrayal.
We owe it to the American worker to fix Social
Security now. And our reforms begin with three essential commitments.
First, if you're receiving your Social Security check, or nearing
retirement, nothing will change for you. Your benefits are secure.
Second, we must not increase payroll taxes on American workers because
raising taxes will slow economic growth. Third, we must give younger
workers -- on a voluntary basis -- the option to save some of their
payroll taxes in a personal retirement account.
Unlike Social Security benefits, which can be taken
away by politicians, the money in a personal account would be yours. And
unlike the money you put into Social Security today, the money in
personal accounts would grow. A child born today can expect less than a
2 percent return after inflation on the money they pay into Social
Security. A conservative mix of bonds and stocks would over time produce
a larger return. Personal accounts would give every younger worker,
regardless of income, the chance to save a nest egg for their later
years and pass something on to their children.
Saving Social Security is an economic challenge.
But it is also a profound moral obligation. Today's young Americans
deserve the same security their parents and grandparents enjoyed.
Because the system is broken and promises are being made that Social
Security cannot keep, we need to act now to strengthen and preserve
Social Security.
I look forward to working with members of Congress
from both parties to keep the promise of Social Security.
Thank you for listening.
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