Just when you thought it was safe to go in the water, Social Security Privatization has reared its ugly head. It turns out George W. Bush doesn’t think his plan was beaten down and killed — in his mind, it’s only resting. In an interview with CNBC’s Maria Bartiromo yesterday, Bush raised the issue from its supposed deathbed.
Some GOP strategists we know were expecting Democrats to revive the ghost of Social Security reform right before the elections, but they may not have been expecting the President to serve it up. Bush told CNBC's Maria Bartiromo yesterday that his Social Security reform plan is "very much alive," and he hasn't given up on private accounts.Now, most of us thought that the resounding public rejection of Bush’s half-baked privatization scheme had taught him a valuable lesson. The public certainly seemed to clearly understand the inherent risks of the plan. Former long-time Rep. Barbara Kennelly of Connecticut, now President and CEO of the non-profit National Committee to Preserve Social Security and Medicare spelled out the problems with Bush’s disastrous plan in this letter to Congress:
The budget analysis makes it clear that the President's privatization plan would increase the deficit dramatically, make significant cuts in Social Security benefits, and cause the Social Security Trust Fund to face a cash-flow crisis earlier than it otherwise would. The President would finance private accounts by taking money out of the Social Security Trust Fund beginning in 2010. According to the Administration's budget, the President's privatization plan would increase the deficit by $712 billion over 10 years. The costs of privatization would balloon thereafter and continue for several decades placing a huge new debt burden on current and future workers.But none of that, apparently, is going to deter George W. Bush if he has a Republican Congress behind him. Here are quotes from the CNBC transcript along with a video clip:
A recent analysis by the Social Security actuaries concludes that the President's plan would actually deepen the cash-flow problems of the Social Security Trust Fund. The plan would deplete the Social Security Trust Fund so quickly that the trust fund would face a cash-flow crisis in 2012, five years earlier than projected under current law.
Under the President's privatization plan, Social Security benefits for future workers would be reduced dramatically. First, the plan would reduce benefits for Social Security private account holders by cutting benefits based on assumed rates of return in their accounts. Second, the President would use “progressive” price indexing to cut Social Security benefits even further, leaving the vast majority of tomorrow's retirees with only a minimal Social Security benefit. In the long run, the plan would effectively dismantle Social Security.
During the past year, private accounts have been fully debated by the American people and overwhelmingly rejected. The President's own White House Conference on Aging repudiated privatization, which, by itself, does nothing to strengthen the long-term viability of the Social Security system.
CNBC: Is the privatization plan effectively dead, regardless of [what] happens in November?
Pres. BUSH: I would call it a reform plan, Social Security. No, I think it's very much alive. […]
CNBC: Can you tell us any detail about the reform you're thinking about?
Pres. BUSH: I can. And that is that, first of all, this is my idea. As I say, there has to be Republicans and Democrats very much a part of the mix for Social Security. I want to--I think the best way to do this is to say if you're a person at a certain income level or below, nothing changes for you, today or in the out years. If you're a wealthier citizen, your benefits increase at the cost of living, as opposed to a higher cost. So everybody's benefits go up, some go up faster than others. And that'll cure a lot of the problem.
I also happen to believe that a worker, at his or her option, ought to be allowed to put some of their own money in a, you know, in a private savings account, an account that they call their own. It's an asset that they're call their own. They'll get a much better rate of return on their own money than they would in the Social Security if the government manages their money for them, for example. And that would be, you know, a valuable contribution to our economy because it's asset accumulation, which is good for American families.
So where do the candidates in the CA-11 race stand on the privatization of Social Security? Right about where you would expect:
Pombo supports the Bush administration’s plan for private Social Security investment accounts, saying they would give people ownership and control over their retirement benefits, while McNerney opposes such accounts as too risky and causing reductions in benefits.
The American Association of Retired People (AARP) has put together a scorecard for CA-11 showing the candidates’ positions on issues important to America’s senior citizens. Jerry McNerney is on the record supporting all of AARP’s positions on Social Security and Medicare — Richard Pombo didn’t respond.
Jerry McNerney has taken a strong and principled position to protect Social Security:
The administration and Richard Pombo are determined to follow their own agenda, no matter what Congress or the American people want and are determined to push their plans to privatize Social Security. Their private account scheme would affect everyone’s payments and jeopardize the entire system. We cannot let this happen. There are over 90,000 Social Security recipients in District 11. We must stop this by defeating Richard Pombo and creating a Democratic Congressional majority that can stop this cruel effort.If you rely on Social Security, if you believe that its role in a American society is vitally important — well, you need to get out there and fight the good fight for Jerry McNerney. Because if Richard Pombo has his way, Social Security will be the next endangered species.