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Social Security Turns 70: Bush Plans Forced Retirement

By Jan Erickson, Government Relations Director

Social Security turned 70 on Aug. 14, 2005, and the Bush administration is ready to retire it. Even though there is a notable lack of public support for privatization, the Republican leadership recently announced that they would proceed with legislation this fall. A number of GOP bills have been introduced that would revamp — and consequently undermine — this vital social insurance program that in 70 years has never missed a check for retired and disabled workers and dependents of deceased or disabled workers.

For some time, polls have shown that the public opposes converting Social Security to a private investment program by two to one, while a whopping 70 percent of seniors oppose private accounts (WSJ/NBC poll). Additionally, a sizeable number of Republicans don't want to vote on a bill that cuts benefits, while Democrats oppose any re-working of Social Security that would threaten the program's solvency. Even with a 231-202 GOP majority, the 218 votes needed to pass a bill seem to be a mountain too high to climb.

But never doubt that the privatizers and their well-financed Wall Street and big business backers can force some kind of bill through the House, and maybe even the Senate. As we learned from the disastrous 2003 Medicare prescription drug bill, the GOP is willing to do what it takes, including "leadership techniques" such as holding a bill until the last minute before a floor vote (so Congress members have no chance to understand what's in it), threatening recalcitrant members with loss of key projects, and just plain lying about the effects of the legislation.

Reportedly, the Republican leadership's goal is to get a retirement or pension bill — any bill — through both the House and Senate and to insert private accounts during the joint House-Senate conference, even if the issue of private accounts has not been voted on by either body. One rumor is that a House Social Security bill will be sent directly to the Senate floor with no Senate hearings and little time to review and debate its merits — un-democratic, to say the least, but that hasn't stopped them yet.

So there is a lot at stake. Unless you are saving several million dollars, planning to win the lottery or have a generous pension (few women do), you are probably counting on the same retirement security many of our parents enjoy — thanks to Social Security and Medicare. If so, you should plan to call or visit your member of Congress right away and urge support for strengthening, not destroying, Social Security.

Bad Bills to Oppose

House Ways and Means Chair Bill Thomas (R- Calif.) is deploying a clever strategy that buys off key GOP members by incorporating their pet ideas into a larger bill — presumably one that would have wide political support. Reportedly, the legislation may not feature private accounts or benefit cuts to Social Security, but may contain a huge bailout for troubled airlines' pension plans, and may propose retirement savings incentives and other attractive initiatives. Then, the privatization language would be added sneakily during the House-Senate conference after passage.

Representative Jim McCrery (R-La.) chair of the Subcommittee on Social Security of the Committee on Ways and Means, is pushing H.R. 3304 (the misleadingly titled GROW "Growing Real Ownership for Workers" Act) that would raid the Social Security "surplus" to finance the multi-trillion dollar conversion to private accounts. This is advanced as a less "painful" move to a private investment system by its advocates, because it simply adds massive costs without cutting benefits to pay for the cuts. They're counting on Congress' tendency to push costs into the future, leaving another generation to foot the bill.

To anyone who can count, it is clear that this approach would seriously weaken near and mid-term financing for Social Security and explode the national debt. In other words, the proposal is a notable example of Republican irresponsibility and fiscal incompetence.

On a related note, the term "surplus" Social Security funds is a misnomer: Those additional millions are flowing into the Social Security Trust Fund to build up reserves to help pay for baby boomers' retirement. A 1983 increase in the payroll tax assured that there would be sufficient funding for many decades into the future.

Another horrible bill is the deceptively-titled Stop the Raid on Social Security Act (S. 1302) which is just a straight conversion to a private investment system, sponsored by Sen. Jim DeMint (R-S.C.) and 11 others. The Republican spin promises to "protect" the surplus by transferring them directly into a broad-based stock index fund.

The notion of saving us from the "raid" of Social Security trust funds for other purposes is downright Orwellian coming from the party that has engineered five years of out-of-control budgets and huge tax cuts for the rich that have drained the Treasury and built up the largest federal deficit in recent history.

George W. Bush has indicated that the core of his preferred Social Security "reform" plan is to severely cut benefits — by altering the formula under which benefits are calculated. Projections show that by mid-century, retirement benefits may be nearly halved.

Democrats Want to Increase Savings

House Democrats have recently introduced a package of proposals intended to help middle-class workers plan and save for retirement. Their America-Save proposal would encourage retirement savings and pension fairness without burdening future generations with additional debt.

Their approach involves an incentive to save through a match from the federal government for the first $1,000 invested in a 401(k) plan or IRA, as well as automatic enrollment in 401(k) plans and tax credits for IRAs. In addition, small businesses would get tax incentives to offer retirement plans. An important feature is a reform of the troubled pension system that would make it more difficult for companies to default on promised benefits.

NOW Acts to Preserve, Improve Social Security

In 2000, nearly seven million women escaped poverty through monthly Social Security retirement checks. For decades, NOW has been actively involved in advocating for a strengthened Social Security program.

Just prior to the NOW National Conference in July in Nashville, Tenn., NOW staged a forum on Social Security with Barbara Kennelly, formerly a long-time House member from Connecticut who is currently president of the influential National Committee to Preserve Social Security and Medicare. Kennelly, who was also recently named to chair the National Council on Aging, spoke of the absolute necessity to protect and maintain the program in its current structure.

Later in July, NOW argued to protect Social Security in a "Women's Debate" at the Capitol. NOW President Kim Gandy joined Dr. Heidi Hartmann, president of the Institute for Women's Policy Research, and Rep. Hilda Solis (D-Calif.) to argue against privatization. Rep. Melissa Hart, (R-Pa.) and two conservative women argued for privatization. The debate focused primarily on privatization's effects on women.

In particular, Gandy and Hartmann discussed the broader family insurance benefits, such as life insurance and disability coverage that would end with private accounts. "We must prevent large-scale benefit cuts and work toward improvements in the treatment of all beneficiaries," Gandy said.

"If wealthy workers are allowed to opt out of the [Social Security] system entirely, it will put an even greater burden on low and middle-income workers to keep the trust fund healthy," Gandy said. "Instead of scrapping the current system, NOW suggests we fix it and fund it."

In particular, benefits for widows, childcare, disabled and divorced women could be increased through raising the taxable wage base. "With a few changes, we can make our guaranteed insurance and retirement program the envy of the world and assure that all women who have given so much to society live out their later years in economic security," concluded Gandy.

Communications Intern Michelle Kline contributed to this story.

 

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