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Economic Summit Is Cover for Destroying Social Security

2004 – online

Dec. 13-18 click here for related stories: social security

From International Labor Communications Association

The Bush administration enthusiastically brands its initiatives with labels that don't quite fit.

How about his "Clear Skies" initiative favored by polluting corporations? Remember the president's economic report that suggested counting burger flipping as a factory job? And whatever happened to "compassionate conservatism?"

It's no surprise, then, that the president's White House Conference on the Economy this week in Washington is not really an economic summit, and is not really about turning our nation's economy around.

Other Worker News...

Union Activists: Protect Social Security—Not Tax Cuts for the Rich

Dec. 17—Working families are calling on President George W. Bush to abandon his scheme to privatize Social Security and instead shore up the nation’s most successful family protection program by requiring the wealthiest Americans to pay their fair share into the system.

“Instead of dismantling Social Security, we should consider plausible solutions,” AFL-CIO President John J. Sweeney said at a Dec. 16 news conference in Washington, D.C., joined by advocates for seniors, women, African Americans and people with disabilities. “Congress could make a substantial down payment on the system with some of the money that Bush wants to use to pay for permanent tax cuts for the wealthy."

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STELCO CHESS GAME DRAGS ON...
By Sam Hammond

IN HAMILTON, Canada's largest steelmaker, Stelco, is reporting record profits while unabashedly screwing its workers, creditors and shareholders. This is because Stelco is under bankruptcy protection, as reported here several times.

In November, the drama took another twist when General Motors announced it was withdrawing from 2005 purchasing because Stelco had not secured a guarantee from the Union that there would be no strikes to interrupt the supply. Also in the news was an offer for financial re-structuring from Deutsche Bank, Stelco's major bond/debt holder that sets a minimum for all the other courtiers (Russian, Swiss, Dutch and American) to top.

This whole fiasco is as phony and transparent as a three dollar bill. The Canadian Courts allow a big capitalist enterprise, with a hundred times as many assets as debt, to screw the smaller capitalist suppliers, tamper with collective labour agreements, cheat its shareholders, and conspire with its major financial institution, Deutsche Bank, to set the pace for an offshore sale.

--Read more..

There are many pressing economic crises the administration should address every day, not in a one-time meeting. Working families are getting squeezed. A whopping 45 million Americans are scraping by without health care. Out-of-control health care costs are making it hard for American companies to compete. Reliable private pensions are disappearing. Our trade and budget deficits are through the roof, and we can't create enough jobs just to absorb the new people entering the workforce. And our nation needs to figure out how to keep family-supporting jobs here at home.

But the Bush event will not address any of those urgent needs. Instead, it is a public relations ploy to launch the president's deeply damaging proposals to privatize Social Security and change the federal tax code to shift more of the tax burden onto working families. His initiatives will help giant corporations and the very wealthy. (Sound familiar?) And it's not even a summit of all the key experts in these fields. Instead, Bush has invited an audience of well-wishers who will second his plans.

Bush's Social Security plan will balloon the deficit and make retirees even less secure – exactly the opposite of what we need. Nearly two-thirds of older Americans count on Social Security for most of their income. Without it, nearly half would be poor. Their life savings could be depleted in private retirement accounts that are subject to the whims of a shaky stock market.

Social Security does need to be strengthened, but private accounts aren't the answer for working families. The latest report by the Congressional Budget Office found the system has enough resources to cover all benefits until 2052 and even beyond, Social Security will still have substantial money coming in, mostly from payroll taxes which, under conservative estimates, will cover about 80 percent of benefits.

Many experts agree the administration's plans would cut benefits for all workers and add an estimated $2 trillion to our already bloated federal budget deficit, when in fact the long-term funding needs of Social Security can be met by much simpler changes and improvements that continue to ensure the program's spectacular reliability.

So who would really benefit from the Bush private accounts proposal? The financial services industry – to the tune of nearly one trillion dollars in fees to manage the new individual accounts, the largest financial windfall for that sector in American history. In Chile, investment companies handling private accounts are collecting fees of 15 to 20 percent. And administrative costs for private insurance range between 12 and 14 percent, compared to one percent under the current system.

What's the alternative to strengthen Social Security? Congress could make a substantial down payment on the system with some of the money that Bush wants to use to pay for permanent tax cuts for the wealthy. Second, Congress could move the Social Security wage base back toward its historical level. Currently, the highest wage earners – those with salaries above $87,900 – do not pay their fair share to Social Security.

As for tax reform, we can expect Bush to push a flat tax, or regressive value added tax, that would shift the burden of taxes further onto the backs of working families. In the coming weeks, the White House is expected to name a bipartisan advisory panel on tax reform to advise the Treasury Secretary. This panel should consider options that benefit all workers, not just those in the upper tax brackets.

So here's an idea for the president. Drop the public relations gimmicks and broaden the agenda. If we are to have a serious discussion about strengthening our economy, schedule talks with real experts, working people and a range of decision makers who are committed to reducing our huge trade and budget deficits, creating good jobs and developing a real economic plan for our country. Anything less leaves us with just another happy name for a disastrous plan.

--John Sweeney is president fo the AFL-CIO.

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