Bush's Social Security Scheme Demands Focused Response

February 9, 2005
By Carolyn Winter and Roger Bybee

Even while progressives are still feeling wounded and rudderless after the Nov. 2 election results, we suddenly face the immediacy of President Bush's all-out attack on Social Security. This assault on Social Security demands a rapid response, intense focus and a massive effort. We must avoid the Administration's trap of suckering us into responding to technical features of the plan rather than addressing the breaking of America's fundamental social contract between the government and its people embodied in Social Security.

First of all, we must point out that the entire structure of retirement security is crumbling in the US. Traditionally, retirement security has been based on a three-legged stool of pension plans, investments drawn from savings, and Social Security. But private pensions are going up in smoke as companies fold and/or workers lose their jobs in mergers. Additional pensions are under-funded and going bankrupt. The state of private pensions is much more perilous than the much smaller shortfall projected for Social Security, even if no modest revisions whatsoever are enacted.

Meanwhile, 401K plans - which employers have increasingly imposed as a substitute for fixed-benefit pensions - have compiled a record of extremely poor earnings, and declining real wages have produced an all-time record low in savings in the US, drying up the pool of funds needed for investment income for retirement. Thus, with the other two legs of the stool wobbling severely, the need for a stable, reliable Social Security system is more urgent today than at any time since the Great Depression to give retirees a safety net.

Secondly, while progressives are rightfully horrified at privatizing any portion of Social Security, it is crucial to stress to the public that the private savings accounts are camouflage for major cuts in the rest of the program. While the news accounts and the pundit-speak is focused on the possible payoffs from "personal" savings accounts, the mention of the accompanying cuts is vague and perfunctory. No one has a clear idea what percentage we are talking about, because it is undoubtedly far deeper than the 25% to 30% in 2042 that the Bush administration is so fond of invoking.

Even the commercial media acknowledge, although in passing, that the private accounts are absolutely unrelated to the purported shortfall in Social Security. In fact, private accounts would drain the system of roughly $2 trillion at the outset and then trillions more in borrowing for decades.

Our message to the public must underscore that the Bush plan is first and foremost a program for major benefit cuts, with the private accounts used to disguise the real aim of dismantling Social Security. We can assume that this strategy is only a part of the right-wing agenda to strengthen the leverage of Corporate America over the workforce by increasing economic insecurity. As a leading right-wing strategist, Stephen Moore, bluntly put it, "Social Security is the soft underbelly of the welfare state. If you can jab your spear through that, you can undermine the whole welfare state." (New York Times, Jan. 23, 2005.)

Ultimately, Bush and his allies probably anticipate a system solely of private accounts. In the interim, they feel confident that they can narrow the public's options by bankrupting the system with the payouts into private accounts with no accompanying increase in revenue. The Administration, for example, has utterly dismissed any consideration of any change in the Social Security tax, now limited to the first $90,000 of income. Yet as the NY Times reported Feb. 4, "Imposing Social Security taxes on incomes of up to $200,000 would come close to eliminating the entire deficit." One might ask why people earning up to $90,000 should be paying a higher percentage of their income than far wealthier citizens.

But introducing even such modest options to the Social Security debate will require progressives to launch a full-scale public education campaign that is both focused and confident in reclaiming the New Deal legacy represented by Social Security.

We must forcefully challenge the basic premise that the Bush strategy is in any way intended to save the system. The Administration can only respond by conceding that maybe some people can make up a fraction of the cut with the private accounts. We must address the whole package of Bush attacks on the stability of Social Security, not just the private accounts. The key question isn't the percent of profit individuals will make on private accounts and the risk involved, it also is the cuts in the rest of the program - for retirees, for the disabled, for families who have suffered the death of a parent. The absurdity of the entire Bush enterprise is demonstrated by the fact that the private accounts not only add a high degree of risk, but actually drain the system instead of replenishing the allegedly insecure funding base.

But the alarmist rhetoric of Bush, a sequel to the cry-wolf buildup for the Iraq war, skillfully plays on widespread cynicism about the reliability of the public sector. Even though Social Security has lifted tens of millions of Americans out of poverty for 70 years and is in solid shape for decades more by adapting minimal changes, the Bush team has incessantly planted seeds of doubt. The Administration and its supporters have constructed a "common-sense" but false explanation (the declining ratio of workers to retirees can't be sustained, which ignores vastly-increased productivity and earnings) for its "impending" bankruptcy.

Even then, rather than address the purported shortfalls, Bush and his supporters pull an obvious bait and switch maneuver by proffering a private accounts option that would turn a small projected shortfall into a huge canyon of debt. Still, given that so many Americans doubt their government's ability to deliver-intensified by Bush's declarations that the system is about to go bust, the corporate and right-wing constituencies of Bush have undeniably created a beachhead on the issue, particularly among the young.

This is no time for paralysis, as we need to concentrate our message on the most critical elements of Bush's attack on the public and then forcefully counterattack. Our message must be clear and easy to follow, focusing on the most important elements of the Bush plan and driving home the severity of the threat to the current system. The Bush plan is immensely complex, and offers many tempting targets - the volatility of the stock market, the huge fees and commissions that will accrue to Wall Street, the spectacular weaknesses of privatized systems in Chile and Britain, and its essence as a government loan for stock market speculation, among many others.

However, we must resist the temptation to respond in a scattergun fashion. The Bush Administration attack on Social Security is intensely focused, and can only be effectively addressed with an equally targeted strategy executed by progressives. For example, the certainty of huge cuts in Social Security benefits is easier for the public to grasp than to engage in speculating whether the private accounts will yield 3%, 2%, or 5% profit. Another point that will resonate strongly is the discrepancy between Bush's warnings of huge Social Security deficits and then calling for a "solution" resulting in trillions of added deficit spending to fund the private accounts.

It is imperative that Democrats and other progressives respond to this issue with passion and moral outrage, rather than scattering public attention across a wide array of facts and figures. We break the connection with our potential constituencies when our argument gets too complicated and drifts away from our core convictions. Further, by raising every possible objection to the Bush plan, we actually give the privatizers more room to manipulate with their false but carefully-crafted assertions. Instead, we must clearly make our demand that there be no cuts in Social Security, because working people deserve to retire with dignity and security. This cannot be refuted.

Carolyn Winter and Roger Bybee are progressive writers and activists based in Milwaukee, Wis. They can be reached at winterbybee@earthlink.net.