I just saw ABC nightly news say that the Republicans are denying that Bush ever said that he would privatize Social Security. However, I have in my hand a summary of the Republican Party Platform (preliminary draft) from the Wall Street Journal. I fear I don't have the date but it was either during or right after the Republican convention, in the front page section, but not on the front page.
It's titled "The Party Blueprint" and consists of summaries of everything the Repubs intend to do if they win. I've been showing it to people when I canvass.
It says, "Social Security
Establish voluntary personal retirement accounts allowing workers to direct a portion of their payroll taxes to personal investments."
Does Bush intend to do what his party platform calls for or not? this is what privitization is. They take money out of the existing social security fund by allowing young workers to divert money to private accounts. This will take over 2 trillion dollars out of the existing Social Security fund that goes to pay seniors retiring today ( --this figure is from the Wall Street Journal also --i have the citation below) and will seriously defund Social Security right at the time when the baby boomers are retiring. This is why Greenspan is talking about cutting social security benefits (also see below).
I also have a summary of talking points I put together from many different sources on the subject of Social Security which contains many facts and citations on this subject. It's long, but I think it's worth reading. I'm making a diary of this because the Kerry campaign needs to use something like this to drown out their spin.
I would much appreciate being recommended so this doesn't vanish out of sight in two minutes.
SOCIAL SECURITY:
TALKING POINT If you want the Social Security System to ensure that you are
taken care of in your old age, you'd better vote for Democrats.
1. The Republican Party Platform for 2004 calls again for "establishing personal retirement accounts that will allow workers to direct a portion of their payroll taxes to personal investments."
Remember what just happened with the stock market bubble in 2000 where all the stocks crashed and they haven't come back up to their old levels since? Well, if you want to risk your Social Security money in the stock market, the Republicans have a deal for you. What their proposal basically means is that instead of being guaranteed a set amount of Social Security income when you retire, you will have to take charge of your own investments and hope that they do well. This is a big if, as there have been long periods of time (for instance, about 20 years from the late 1960s to the early 1980s) when the stock market did nothing but lose money or tread water. Of course, you can also invest in bonds (which lose value whenever interest rates go up), or commodities (cotton, gold, oil, copper, etc) or fine art or I guess whatever you want, if you know what you are doing and have a lot of luck. However, if your investments don't do well, you will be out of luck come retirement time.
Of course, the Republicans say this is all "voluntary" and only a portion of the Social Security fund will be set aside for these accounts. However, don't be fooled. This is just a "foot in the door" strategy on their part and they make NO bones about this. They've been wanting this for years. They make it sound like a really good thing for YOU. It will give you "freedom to make your OWN decisions," they will tell you. But think how good it will be for corporations to have the "freedom" of having all your hard-earned Social Security tax money invested in their companies? And, of course, these same corporations are the ones who are busily under-funding your pension plans at the same time!
You and I know that not everyone can make their own investment decisions wisely. People who work full time jobs every day and have a family and other concerns often don't have the time or energy or skills or knowledge to be able to take charge of their own investments. What if you have the bad luck to make a mistake? And what about the fact that the Stock Market is not a level playing field? Someone loses for everyone who wins? Think of Enron. Who is more likely to win --you or those in positions of power? Do you want to take the chance of spending your old age in poverty?
Facts:
* Dow Jones Industrial Average
Dec. 31, 1964: 874.12
Dec. 31, 1981: 875.00
These facts are taken from an article by Warren Buffett, the famous investor who owns Berkshire Hathaway Corp. He wrote it for Fortune Magazine. in 2002. Here he shows that in the 17 year period from 1964 to 1981, the Dow Jones Industrial average (the major industry index in the Stock market) gained only one-tenth of one percent in that whole time. This means that if you were invested in the supposedly most reliable stocks in the stock market for 17 years in that time period, you would come out with only a fraction more than you had put into it. Is this the kind of chance you want to take with your social security money?
Compare this to this period:
* Dow Industrials
Dec. 31, 1981: 875.00
Dec. 31, 1998: 9181.43
If you had invested money in THIS 17 year period, you would have made a ton of money. However, this included a period when there was a huge stock market bubble which also crashed leaving many investors out of luck. Would you have known when to sell before you lost your shirt? Lots of people didn't and lost thousands of dollars in their retirement accounts and were forced to work years longer to make up the losses. Luckily, they at least knew they were going to get Social Security. Will you be so lucky?
2. The Republicans also gloss over the fact that, according to the Wall Street Journal, Sept. 2, 2004, page 1 - having Social Security personal investment accounts will cost the government even MORE money. This money will come out of the payroll taxes that you pay into the current Social Security System. But this means that there will then be LESS money in the current system, which they are already telling us doesn't HAVE enough money in the first place to take care of all the baby boomers who are going to need their retirement income over the next 20 years.
Fact: Diverting just two percentage points of payroll taxes would create a gap of up to $2 trillion in the Social Security Fund over the first 10 years, acc. to the Wall Street Journal, Sept. 2, 2004. How would they make this gap up? Here are the Bush administrations own internal ideas from a document the Treasury Department prepared for Bush:
a. Borrow even more money (see National Debt above)
b. Curb the growth of benefits!
Fact: In response to the Bush administration's ideas about doing this a couple of years ago, his then Treasury Secretary, Paul O'Neill said that Mr. Bush needed to be asked,
a. "Is he willing to live with benefit cuts (ie., "pain)?
b. What is the meaning of "voluntary"?
c. Does he want to inflict pain on everyone or just those who voluntarily opt out of the system?"*
* This is from an internal Treasury Dept. memo dated October 25, 2001.
3. So, what is the real truth of their claims that there isn't enough money in the Social Security Trust Fund?
Facts:
a. Year through which Social Security and
Medicare are fully funded without any.
changes to the system? 2042
b. Percentage of Social Security and
Medicare benefits that will be funded
after that, even without changes to the
program? 73%
So why does everyone worry about the problems funding
Social Security? Well, because even though you and I have paid enough money into the system to make the above facts true --in other words, we have funded Social Security with our own money so that it SHOULD be currently solvent, the fact is that the Bush administration has gone through all that money, spending it on other things! It has spent all the money in the Treasury that was there when Clinton left (5.6 trillion dollars) and now is terribly in debt. The government doesn't actually HAVE a separate budget for Social Security. The money just comes out of the general fund for operating expenses.
You might recall that Al Gore wanted to put that money safely aside in a "Lock box," as he explained when he was running for President in 2000. But he got ridiculed for this idea, lost the election and now the Republicans are telling us the sky is falling and that "there's no money, no money" for Social Security.
4. Alan Greenspan, the Chairman of the Federal Reserve, tells us that because there is now there is no money we will have to sacrifice to keep our social security. We will have to wait longer to receive benefits and our benefits may be cut.
a. Well, this certainly sounds like he is starting us in on the Bush Teasury Department Plan b above --ie., "we need to curb benefits." But, if he was worried about this, why did Mr. Greenspan give his blessing to the Bush administration when Bush cut taxes for the wealthy when he first took office? And what about those taxes on the wealthy? Suppose we took some of them back, as Kerry wants to do? Suppose we taxed the wealthy on more of their income over $87,900, which is the limit of their pay they have to pay into the Security System even though they receive full benefits? What about the 60% of corporations who pay no income tax at all in this country? Maybe we could tax some of them? There are ways we can make SS solvent without cutting benefits. Even some Republicans, such as South Carolina Republican, Linsay Graham, have suggested these things, but the Bush administration opposes raising taxes on anything. In fact, Bush wants to cut taxes even further in his next administration (see Republican Party Platform 2004 taxes).
b Fact:
Alan Greenspan in the 1980s was the Chair of a commission on Social Security. At that time he persuaded Congress to increase the payroll (Social Security) tax for the express purpose of making sure that the Social Security fund would be okay in the future. This succeeded. By increasing the tax, a SURPLUS was generated in the fund. This surplus was a big part of what was spent by Bush in giving tax cuts to the wealthy and which Greenspan supported. According to economist, Paul Krugman, "now that those tax cuts have contributed to a soaring deficit, he wants to cut Social Security benefits."
Krugman continues, "If Mr. Bush wins in November, we can be sure that they (the Bush administration) will move forward on privatization (personal SS investment accounts)...These will be sold as a way to `save' Social Security (from a nonexistent crisis), but will in fact undermine it's finances. And that, of course is the point."