Online at: http://politicalaffairs.net/article/articleview/873/1/86

Bush's Social Security Crisis Rhetoric Falling Flat

By Joel Wendland

Archives - Dates and Topics

2005 – online

March – April 2005

Mar. 28 – Apr. 2 click here for related stories: social security

3-30-05, 10:00 am

Opponents of Bush's Social Security privatization plan continue to wonder what crisis President Bush and the Republicans are talking about as they try to sell the president's plan to the public.

Trustees of the Social Security Trust Fund reported March 23 that without changes to address long-term financing problems, the trust fund would be able to pay full benefits until 2041, and there would still be sufficient money coming in to cover 74 percent of benefits thereafter.

Bush's privatization plan would worsen Social Security’s financing problems. In a press conference on March 16, Bush admitted that his plan would likely not boost Social Security's financial situation. On the contrary, experts estimate that Social Security will run out of surplus revenues in 2030, 11 years earlier than now projected, says the leading labor union. As it stands Bush's plan looks less like a "reform" than a means of dissolving Social Security altogether.

Critics of the Trustees' report say that extremely conservative economic forecasts used to arrive at these numbers suggest that other predictions, such as the one by the Congressional Budget Office (CBO) in 2004 that says the program will be able to pay full benefits at least a decade longer than the Trustees say, are closer to reality. Even the Trustees' unrealistically conservative numbers show a 12-year improvement in the program's outlook since 1997, when trustees projected a shortfall beginning in 2029.

Either way you shake the numbers, the Trustees's report suggests that economic policies under Bush have worsened Social Security's financial picture – even if only slightly, while under Clinton it was dramatically improved.

Nevertheless, much of the doom-and-gloom analysis coming out of the White House and the Republican Party is falling flat – in Congress and in public.

According to CBO estimates, the private accounts Bush is proposing to replace the Social Security system with will cost between $1 trillion and $2 trillion.

The non-partisan CBO adds that this money can be found by either raising taxes or cutting benefits. Since majorities in Congress appear to oppose both options, Bush's plan seems to be at an impasse.

Congressional Republicans couldn't bring a tax increase proposal to their constituents, and benefit cuts would likely send dozens of incumbent members of Congress into early retirement as tens of millions of seniors and their families would be mobilized to vote for alternatives.

According to pro-business news source Bloomberg.com, this impasse has ground Bush's pro-privatization momentum to a halt.

GOP strategists concede that Bush's plan may not get off the ground this year, but they expect to raise the issue again when they believe strong and broad opposition to privatization will have faded – perhaps as early as next year.

Public opinion polls show consistent growth in popular opposition to Bush's plan. Opposition grows even stronger when those surveyed are asked if they could support the plan if benefits were cut to pay for it.

Resistance sharpens further when people are asked if they could support Social Security privatization if it meant greater financial hardship and bigger budget deficits.

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When asked about alternatives to Bush's idea, people widely support eliminating the $90,000 cap on income subject to Social Security taxes. Currently, individual income over $90,000 is not taxed. This means that the Social Security system is almost entirely and disproportionately funded by low- and middle-income working people.

People also strongly oppose raising the retirement age.

A more recent poll conducted by the Pew Research Center points to growing opposition to Bush's plan among people under 30 years old. Less than half of this age group supports Bush plan, while almost two-thirds are said to have supported it a year ago. In this grouping, disapproval is greatest among those youth who also stated that they had "heard a lot" about Bush's Social Security plan.

This turn around in public opinion has occurred in the midst of a high-powered, glitzy nationwide media blitz and cross-country campaign by Bush and several members of his administration to build support for his privatization plan.

Some congressional critics of Bush's plan point out that an important reform would be aimed at the spending habits of the US government rather than the program itself. A bill introduced by conservative Democrat Rep. Dennis Moore (KS) would order that money received from the Social Security payroll tax would be used solely for ensuring the solvency of the program and paying benefits, not shifted to other parts of the federal budget or to make the ballooning deficit appear smaller.

For those who oppose privatization on the principled grounds that our society must provide a safety net for retiring or disabled working people, Bush's privatization plan simply discards the social duty. According to the AFL-CIO, the leading umbrella organization of labor unions, which along with senior citizen organizations such as AARP, Bush's plan would replace Social Security’s guaranteed benefits with risky private accounts that would neither guarantee a better return nor individual control over one's finances.

The AFL-CIO has mobilized thousands of its members in opposition to Bush's plan. An e-mail and letter writing campaign targeting investment companies to withdraw from a pro-privatization coalition of businesses and business associations has led to some success. At least one member of the coalition has withdrawn under pressure.

The union has scheduled more public demonstrations at the West Shore, Tampa, Florida offices of investment firms Charles Schwab and Wachovia on March 31 from 4 p.m. to 6 p.m. A similar protest will be staged at the St. Petersburg, Florida Charles Schwab at the same time.

The Bush plan, the union says, would slash guaranteed benefits for young workers today by as much as $152,000 – even for those who did not choose private accounts and saddle our children with $4.9 trillion in new debt over the first 20 years.

Even worse, Bush's privatization plan would worsen Social Security’s financing problems. In a press conference on March 16, Bush admitted that his plan would not boost Social Security's financial situation. On the contrary, experts estimate that under Bush’s scheme Social Security will run out of surplus revenues in 2030, 11 years earlier than now projected, says the leading labor union.

As it stands Bush's plan looks less like a "reform" than a means of dissolving Social Security altogether.

At stake is also the central question of racism. In a cynical attempt to convince some that Social Security needs "reform," Bush says that African Americans cannot fully benefit from the program because of low life expectancy rates and thus are hurt by it. Suddenly Bush is interested in the plight of African Americans?

Low life expectancy among African Americans has more to do with high infant mortality rates, lack of access to costly private health insurance, environmental racism, and a discriminatory criminal justice system that disproportionately hurts African American children and youth. When has Bush ever expressed an interest in tackling these serious problems?

Bush's maneuver angers Jarvis Tyner, a vice chair of the Communist Party USA, who, in a recent speech, called for stepping up the effort to block the Bush administration's attempts to dismantle civil rights. Tyner also challenged Bush's resistance to renewal of the Voting Rights Act, which is set to expire in 2007.

The People's Weekly World quoted Tyner: "Bush’s phony Social Security ‘reform’ is more in-your-face racism," Tyner said. "How dare Bush use the mortality of Blacks to rationalize his effort to take their Social Security away? African Americans use and need Social Security more than any other group, as 11 percent of the work force but 18 percent of people using Social Security."

--Joel Wendland is managing editor of Political Affairs and may be reached at jwendland@politicalaffairs.net.