The Phony Social Security Crisis

The Phony Social Security Crisis
By Lynda Carson January 13, 2005

On Tuesday January 11, the The Bush Administration held a large conference in Washington D.C., to dupe the public into believing that Social Security is in a phony crisis and that only privatization of the program can solve the phony crisis.

Before the glaring lights of the American mainstream media, Bush declared, "As a matter of fact, by the time today's workers who are in their mid-20s begin to retire, the system will be bankrupt. So if you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now."

Legislated by numerous acts of Congress, the fact remains that the Social Security system will not go "bankrupt," because it has no creditors. Legislated by law, the Social Security trustees are required to pay reduced benefits even if the trust fund becomes exhausted. The payroll taxes will continue to come in and the benefits shall continue to be paid to all recipients.

A recently leaked White House memo by Peter Wehner states, "I don't need to tell you that this will be one of the most important conservative undertakings of modern times. If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever. The scope and scale of this endeavor are hard to overestimate."

"Let me tell you first what our plans are in terms of sequencing and political strategy. We will focus on Social Security immediately in this new year. Our strategy will probably include speeches early this month to establish an important premise: the current system is heading for an iceberg. The notion that younger workers will receive anything like the benefits they have been promised is fiction, unless significant reforms are undertaken. We need to establish in the public mind a key fiscal fact: right now we are on an unsustainable course. That reality needs to be seared into the public consciousness; it is the pre-condition to authentic reform."

In the leaked memo Wehner goes on to state that, "For the first time in six decades, the Social Security battle is one we can win -- and in doing so, we can help transform the political and philosophical landscape of the country."

In response to the Bush Administration's phony Social Security crisis, Rep. Charles Rangle said, "But the facts prove that there is no imminent crisis with Social Security. The nonpartisan Congressional Budget Office says Social Security can pay full benefits for nearly 50 years. So, there is no crisis. But there is a challenge, because people are living longer."

"Unfortunately, the President's proposal for privatized accounts makes Social Security weaker, not stronger. It drains $2 trillion from the trust fund, leading to drastic cuts in benefits of more than 40 percent."

Opposition to the Wall Street/Bush Administration's efforts to privatize Social Security is mounting from all over the nation. It includes AARP, the NAACP, the National Organization for Women (NOW), major unions such as the AFL/CIO, Cal PERS (pension plan) of California, the Gray Panthers and other opposition groups are springing up all across the nation.

The Bush Administration is promoting a phony crisis about the Social Security program and has embarked upon a propaganda media blitz to convince the American public that Social Security is heading for an iceberg, and needs to be privatized. Expected costs to privatize Social Security are around $2 trillion.

There is no immediate crisis in the Social Security program. According to the Congressional Budget Office (CBO), if Social Security is left as is without any changes, it will be able to pay full benefits to all recipients until 2052 and around 80 percent of promised benefits beyond that.

By 2018 Social Security will begin paying out more each year than it receives in taxes annually, but this does not mean the program will collapse when this occurs. It must also be noted that by 2018 the Social Security Trust Fund should hold at least $5.3 trillion in US Treasury Bills, which will allow the Trust Fund to grow by another 25% during the next decade due to the interest it earns on the Treasury Bills.

Social Security is a 70 year old retirement program that started in 1935, and was created as a direct result of the 1929 stock market crash that left millions of the elderly stranded in abject poverty. Social Security assists the elderly and disabled population with a meagre benefits package that helps to overcome poverty, and the program also offers assistance to widows and children.

In an effort to convince the public that Social Security must be privatized, the White House and it's wealthy corporate allies are using scare tactics to convince the general population that Social Security will collapse when the baby boomers retire.

The big lie is meant to dupe the younger generation into believing that Social Security cannot keep it's promise to them, and that they would be better off by gambling away their Social Security funds with the profiteers on Wall Street.

The Bush scheme offers no guarantees to the younger generation whom will end up paying more for less, than what is already being offered to them in the current system. The Bush Administration is already demanding benefit cuts to all future recipients, and is trying to convince them that the stock market will make up the difference in lost benefits.

THE REAL CRISIS

It appears that the Bush Administration is looking for a way to avoid paying back the $5.3 trillion that will be owed to the Social Security Trust Fund by 2018. Privatization of the Social Security program may be the ticket to avoid rolling back the multi trillion dollar tax cuts for the wealthy that are actually needed to cover the huge budget deficit that exists. Theres no crisis in Social Security. The crisis is in the federal government, and unless the tax cuts for the rich are rolled back, the federal government lacks the revenues needed to cover it's national debt.

GROWING OPPOSITION TO SOCIAL SECURITY PRIVATIZATION

One of the local Bay Area opposition groups with members from across the nation is called Social Security Now! It's a grassroots effort that has a Rolling Letter Campaign happening to send letters to editors of newspapers all around the country. These letters of opposition to the Wall Street/Bush Administrations efforts to hand Social Security over to corporate control, have been published in USA Today, the Berkeley Daily Planet, the Anderson Valley Advertiser and other media outlets all across the country.

Opposition members such as Jean Pauline, says, "Dire predictions regarding future solvency of Social Security are based on inordinately pessimistic estimates of economic growth. Does it make any sense to try to prevent insolvency by retarding economic growth? Bush's proposed privatization will do just that by further increasing the deficit or raising taxes to pay the very high cost of any transition to this Wall Street scam."

Charles Kalish from San Francisco said, "Instead of the guaranteed security of the present safety net, Bush and Wall St. have created a phony crisis that will place low income people at the mercy of the gambling den of the stock market. Chance will replace security and many, many seniors will be left destitute as a result."

Berkeley resident Frances Hailman said, "Bush rushed us into war without envisioning where it would lead us. We are now stuck in a situation that is draining our country's common wealth. Now he would have us agree to a hurried change in social security, with no clear examination of longterm consequences. Lets not be fooled again!"

Activist Marta Russell said, "What is to stop the Conservatives from delivering a blow to the
Disability Insurance Trust Fund (a separate account in the United States Treasury) as they plan for the retirement fund? If the Bushites succeed in their privatization scheme and funds
are diverted from the Trust fund into stock market accounts, the pool of monies available to pay out on current retirees will shrink to an estimated $2 trillion shortfall. That will unravel the fund, shrink the common pool of funds and jeopardize SSDI. How can the disability insurance system stay intact while the retirement system is destroyed?"

The struggle to save Social Security from Wall Street will continue for some time ahead as groups across the nation form in opposition to the scheme to privatize Social Security.

Anyone can join the Rolling Letter Campaign with Social Security Now!, by sending an e-mail to;
socialsecuritynow-subscribe [at] yahoogroups.com

Lynda Carson can be reached at tenantsrule [at] yahoo.com .