Phasing out Social Security......?

[madfloridian]

You know those Dream Accounts, the 401ks that have been pushed lately? I have said, and I believe they are the foot in the door to phase out Social Security. They start with forming them "in addition to", and then as the older folks are gone....most will be on the 401ks run by private companies.

From 2004 Josh Marshall at TPM gives some insight that it will be gradual.

But that's the essence of it: abolishing Social Security or not.

Imagine for a moment that we were having a different sort of Social Security debate. In this alternative universe it wouldn't be about reform or privatization or who had the best plan to save Social Security. The issues would be different. The question would be whether we should abolish Social Security and replace it with a system of loosely-federally-regulated 401ks, or not.

It wouldn't be abolished overnight, of course, but phased out over time. So any oldsters collecting benefits now wouldn't need to worry. And the same would probably go for pre-fogies too ... say, anyone over 55.

But that's the essence of it: abolishing Social Security or not.

Well, guess what? That is exactly the debate we're having. Only many of Social Security's defenders don't seem to know it. It's not that they don't know it exactly. They, more than anyone, understand the stakes involved. But for all the great facts they're bringing to the table, they still seem content to frame the argument in a way that obscures the true issues involved and benefits their opponents immeasurably.

If the shoe were on the other foot, Republicans would not make the same mistake.

He hit the nail on the head. Our Democrats have been obscuring the issue to make us think they have backed off. I don't think they have changed. Not the "policy shop" as they too often in the past came out in full favor of privatizing this program. They may have changed rhetoric, but not goals.

Kevin Drum examined privatization of Social Security abroad. An apt topic since with the new Peru trade deal, it may be they are locked into their failing one.

NAFTA vote could force privatized Social Security on Peru

The proposed Bush expansion of NAFTA to Peru contains frightening provisions that could lock Peru into a privatized social security system similar to the Bush proposal that Democrats successfully fought last Congress. The main beneficiary of the provision seems to be Citibank, the largest shareholder in ProFuturo AFP, a company authorized to compete against Peru's national social security system.

If a lot of members of Congress vote for the Peru "free trade agreement" (FTA) containing this outrage, it could set a dangerous precedent for Social Security policies here at home. Congress needs to hear that Social Security has no business in a trade agreement.

From Kevin at the Washingtonian in 2004:

SOCIAL SECURITY AROUND THE WORLD....

First there's Chile. They implemented privatization a couple of decades ago, and originally the World Bank was enthusiastic. Today, though...not so much. Greg Anrig of the Century Foundation summarizes:

Investment accounts of retirees are much smaller than originally predicted — so low that 41 percent of those eligible to collect pensions continue to work. The World Bank found that half of the pension contributions of the average Chilean worker who retired in 2000 went to management fees. The brokerage firm CB Capitales...found that the average worker would have done better simply by placing their pension fund contributions in a passbook savings account.

Sweden implemented a partial privatization back in 2001. Here's what the president of the Swedish Society of Actuaries reports:

General benefit levels have been significantly lowered, future benefits are impossible to forecast, and administrative costs have quadrupled — mostly because of the mutual fund part — to 2.0% of total benefits. (If real investment return is 3% per annum, the amount accumulated after 30 years of regular annual savings will be 22% lower if the cost factor is 2.0% instead of 0.5%.)

....Everyone in the new system is forced to speculate in mutual funds and results in the first years have been disastrous. From March 2000 until March 2003, the Swedish stock market declined by 68%. As of 31st January 2004, 84% of all accounts had lost money, despite the upturn in the market since March 2003.

Aren't you glad that President Bush wants to follow in the footsteps of glorious successes like these?

By-passing critics and congress...scary stuff from Josh Marshall in 2004:

Bush circumvents critics in Congress and the media

The Post discusses the president's domestic policy plans and particularly the effort to phase out Social Security.

One nice passage: "To build public support and circumvent critics in Congress and the media, the president will travel the country and warn of the disastrous consequences of inaction, as he did to sell his Iraq and terrorism policies during the first term, White House officials said."

This would seem to be an analogy critics could use to some good effect.

The agenda includes creating private Social Security accounts for younger workers, revising the tax code to make it less complicated, limiting the size and number of lawsuits, and changing immigration laws.

Bush worked with the Heritage Foundation. Oh, that would be the same Heritage Foundation our leaders in the Democratic "policy shop" are uniting with.

Why are our Democrats working with right wing groups on Social Security

The Progressive Policy Institute, The Committee for a Responsible Federal Budget, The Heritage Foundation, and The New America Foundation co-hosted this policy forum...and Lindsey Graham

From 2002 we learn the goal of the "policy shop":

The DLC Comes to Manhattan

The DLC champions privatization of Social Security as a centerpiece of its program for the new century. Or in DLC speak, as Will Marshall, one of its founders, puts it, "using choice and competition to advance...the big social insurance programs like Social Security and Medicare." The DLC provides bipartisan support for a Bush folly that, as Senator Tom Daschle says, would turn Social Security from a guarantee into a gamble.

Now I know from researching this something I did not know before. I found out who urged the tax on Social Security, which had already been taxed once. It was the DLC to their shame. Here is a speech from 2004 by Major Owens.

Good point by Major Owen

One of the mistakes that the DLC made was putting a tax on Social Security. The damage that this measure has done in terms of the Democratic Party’s image is immeasurable. In the tax package of 1993, we could have forgone taxing Social Security. This was the beginning of the erosion of Democratic support from senior citizens. So I was not shocked when the AARP came out and supported the Republicans’ phony Medicare prescriptions. Republicans have done that before—taken it over with a coup, and won. We can slowly see senior citizens drifting away from us every time there is an election. In the case of the House of Representatives’ members, this is especially true. It has to be admitted that senior citizens are drifting away from the Democrats toward the Republicans. This may not be total and complete at the present, but we have lost them.

From 1999 their true goal emerges:

The Real Threat to Social Security

Not long ago, Al From, the head of the centrist Democratic Leadership Council, had lunch with Marron and another PaineWebber official. The DLC, whose purpose is to realign the Democratic Party away from its traditional alliance with the AFL-CIO, is strongly leaning toward NCRP-style privatization. The November/December 1998 issue of The New Democrat, the DLC's bimonthly magazine, is filled with a series of pro-privatization stories under the heading "Less Than Secure: Rebuilding Social Security for the 21st Century"; it includes a piece by Senator Breaux outlining the commission's proposals.

Maybe they all decided a better approach would be a gradual one, phasing it out without saying they are doing it.