February 4, 2005

Bush Declares War On Social Security

By BILL PRESS

Thanks to a friend in Congress, I watched this year’s State of the Union address, not from the sanctity of my living room, but from the majesty of the House of Representatives — where I sat in the balcony, along with other invited guests.

It is a great American spectacle. It’s even more exciting in person than on TV to hear the House sergeant at arms announce: “Mr. Speaker, the president of the United States.” And this year’s event was especially electric, coming on the heels of both the American and Iraqi elections. But that didn’t change the substance of the speech. President Bush’s plan to wreck Social Security is still a big loser.

Have you noticed the pattern? On Social Security, Bush is repeating the same modus operandi he used with Iraq: scare us into taking an unwise and unnecessary action. First, he manufactures a phony crisis. Then he proposes a phony solution. Result, if we’re dumb enough to fall for it: chaos.

The crisis in Iraq, according to the president, was Saddam Hussein’s massive biological, chemical and nuclear arsenal. Wrong! The only solution, he insisted, was a pre-emptive invasion, after which American soldiers would be welcomed as “liberators.” Wrong again! And Bush is just as wrong about Social Security.

As he describes it, the “crisis” with Social Security is that the system is bankrupt and will collapse unless we act immediately. Wrong! Yes, something must be done to make sure Social Security doesn’t run out of money, but that’s not going to happen tomorrow. Once again, the president is misleading the American people.

Social Security, in fact, is the only government program that actually makes money. This year, the program will bring in about $180 billion more than it pays out. And it will continue in the plus column until the year 2028, at which time it will begin to draw on its $3.5 trillion surplus. Then the surplus will carry through until 2042, according to the Social Security Administration — or until 2052, according to the Congressional Budget Office. In other words, there’s plenty of time to fix the system. We don’t have to rush into anything. We certainly don’t have to rush to adopt the dangerous Bush plan.

As outlined in the State of the Union, Bush proposes fixing Social Security by allowing younger workers to withhold 4 percent of their payroll taxes from Social Security and invest them in the stock market. Sounds good, but he’s wrong again!

Apparently, everybody but George W. Bush realizes that investing in the market is no guaranteed retirement egg. Only Social Security is truly secure. That’s why we call it Social Security.

What if some poor carpenter had put all his retirement funds in Enron, for example, and lost it all? The government would have to provide some kind of safety net — and the rest of us taxpayers end up paying twice. Meanwhile, merely setting up the private accounts will add another $2 billion to the deficit. And because there would be less money in the system, Social Security benefits would have to be cut for future retirees, perhaps by as much as 40 percent.

Clearly, the way to fix Social Security is not to take money out of the system, but to pump more money into it. There are various proposals for doing so: raising the retirement age; means-testing Social Security; or raising payroll taxes. Any one of them is preferable to Bush’s half-baked idea. Besides, we already have government-sponsored private investment accounts. They’re called IRAs.

But that’s not all. Knowing he has little credibility left, Bush tries to sell his snake oil by wrapping himself in the political mantles of Bill Clinton and the late, great Pat Moynihan. President Clinton, he points out, said that saving Social Security must be our “first priority,” and former Sen. Moynihan endorsed private accounts.

Has the man no shame at all? At best, Bush is telling a half-truth. Yes, Clinton often said Social Security must be our “first priority” — instead of Bush’s tax cuts for the rich! And yes, Sen. Moynihan favored private-market accounts — but only in addition to Social Security, not instead of.

To me, there’s only one question: On Social Security, whom do you trust: Franklin Roosevelt or George W. Bush? If you choose Bush, don’t come running to me for a safety net when your stock picks crash.