SS Trust Fund Fraud May Become Bush's Watergate - article here

[cyberpj]

Social Security Trust Fund Fraud May Become Bush's Watergate,
Suggests Author of 'The Looting of Social Security'

(snip).......

The Social Security surplus generated by the 1983 payroll tax increase was supposed to be used to pay down the public debt. This would have been accomplished by purchasing regular marketable Treasury bonds in the financial markets. If this had been done, the trust fund would contain real assets and it would be able to pay full benefits until 2042. However, Smith maintains that President George H.W. Bush began using the money as if it were general revenue, and non-marketable special issue government securities were issued. Smith says that President Clinton continued this practice, so every cent of the Social Security surplus that flowed in under both Bush Senior and Clinton was spent. This misuse of Social Security funds became a major campaign issue in 2000, and both George W. Bush and Al Gore pledged to end the looting. President Bush repeatedly promised not to touch the Social Security money. Finally, in his first State of the Union address, delivered on February 27, 2001, Bush said, "To make sure the retirement savings of America's seniors are not diverted to any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social Security, and for Social Security alone."

In casting their votes in the 2000 election, the American people, whether they voted for Gore or for Bush, were voting for a candidate who had solemnly pledged repeatedly that no Social Security money would be used for non-Social Security purposes. Smith argues that George W. Bush violated both that pledge and federal law when he spent every dollar of the $509 billion in Social Security surplus that was generated during his first term. "He continues to violate his pledge, and the law, each and every day as he spends the approximately $400 million in Social Security surplus that becomes available on a daily basis," said Smith.

Smith argues that the Bush privatization proposal is a Trojan horse to distract attention away from the looting of Social Security money. According to Smith, "Bush and Greenspan know that the government will face a major financial crisis beginning in 2018 when Social Security begins to run deficits, and the public discovers that there is nothing of value in the trust fund." Smith believes that "given the fact that Bush acknowledged the looting problem during the 2000 campaign, and made a solemn promise to the American people to end the practice, his misuse of Social Security money is a serious breach of the public trust," and Smith suggests that historians may refer to Bush's misuse of Social Security funds as "Bush's Watergate."



http://biz.yahoo.com/prnews/050201/fltu022_1.html

[King Coal]

1. God, we are so screwed.

[cyberpj]

2. Maybe we can make them pay it back with war profits. eom.

[NewJeffCT]

4. well, going in, Iraq was supposed to cost only $1.7 billion

And, I'm sure some of that was for first aid from the rose thorn injuries of the flowers that the Iraqis were going to throw at our soldiers. ;=)

[Inland]

3. Conservative pundits argue that there is no legal obligation

to use the SS fund for SS benefits. The biggest problem, in their view, is that Government might renege on its promises of benefits forty years from now--we just can't trust government. That's the worst case scenario.

The only solution they can come up with is to take away all uncertainty by declaring today that the benefits won't be paid. The worst possible scenario is instituted by intent.

Having declared goverment can't be trusted, Pubs prove beyond a doubt that the present government can't be trusted.

[King Coal]

5. But we're spreading all that freedom around. It cost money to spread

freedom around. </sarcasim>

[cyberpj]

7. "It's hard werrrk...." I mean.... "It's haaarrrrd...." eom.

[King Coal]

18. Don't forget about Poland! He keeps forgetting about Poland!

[cyberpj]

6. Good,then let's argue, at least that will get it all out on the table! eom

[cthrumatrix]

28. good idea...let's start with FACTS

[BlueInRed]

16. if that is the case, they why do they keep buying

the same T-Bills (govt securities) with our excess SS contributions? Shouldn't we say to the Rs that if you think these securities are worthless, you better quit buying them and instead purchase a security or asset with real, tangible value. Otherwise, you're committing fraud on the public.

(Of course, I don't actually think they are worthless, but it is ridiculous for them to argue they are worthless, when it is Reagan and Greenspan who suggested the purchase of these very securities as part of the "fix" in 1983. They can't have it both ways. Either they were lying then or they are lying now or -gasp- lying both times.)

[cthrumatrix]

19. what do you expect them to say? I say get a constitutional lawyer -- NOW

[earth mom]

8. No wonder *'s campaigning so hard for this-he's trying to save his own a$$

eom

[cthrumatrix]

25. He is covering the "mafia like bookeeping in Washington"

this deserves an extensive "full blown deep throat" audit.

[zann725]

34. Yep! I'll bet he's spent most of it already.

White-Collar Crime...an understatement indeed.

[CWebster]

9. What was supposed to happen in 2018:

"...This is where the second twist comes in. Because the surplus payroll taxes were handed over to the federal government (in return for Treasury bonds), this meant ordinary income taxes could be kept low. After all, the federal government has a fixed need for money, and if it gets excess money from payroll taxes it can afford to keep income taxes lower than they'd otherwise be.

But the payroll tax is a flat tax, paid disproportionately by low and middle income workers. The income tax is a progressive tax and is paid disproportionately by high earners.

So this was the implicit bargain in the reforms recommended by Greenspan and signed into law by Reagan: From 1983 to 2018, low- and middle-income earners would pay excess payroll taxes. This allowed income taxes to be kept low, and primarily benefited high earners.

Then, beginning in 2018, instead of raising payroll taxes to pay for baby-boomer retirement benefits, Social Security would begin selling its bonds back to the government.

To pay for those bonds, income taxes would be raised - high earners would begin paying higher income taxes.

In other words, the fact that income taxes will eventually need to be increased in order to cover Social Security benefits was part of the Greenspan/Reagan plan from the start.

That's the real meaning of the trust fund: It's an implicit promise that high earners will keep their part of the bargain and begin paying their share of Social Security's costs when the baby boomers retire.

So to suggest, as Senator Allard and others sometimes do, that the trust fund is just a bunch of meaningless IOUs that will never be paid back is more than just a breach of faith between generations. It's a breach of faith among taxpayers.

For more than two decades, low- and middle-income Americans have kept their part of the bargain, paying more in payroll taxes than Social Security needs and helping to keep income taxes low. In return, beginning in 2018, high earners are expected to start paying a bit more in income taxes in order to help keep payroll taxes low.

That's the bargain that was struck in 1983. It's one we should keep.


http://www.csmonitor.com/2005/0127/p09s01-coop.htm

Talk about class war!

Thanks to Drifter who provided this link

[cyberpj]

10. We should be sending this to our Dem reps -- to help them understand

This is perfect for Dems to highlight - it's so... so... FAIR!

And the CS monitor article is well written and easy to comprehend.

For more than two decades, low- and middle-income Americans have kept their part of the bargain, paying more in payroll taxes than Social Security needs and helping to keep income taxes low. In return, beginning in 2018, high earners are expected to start paying a bit more in income taxes in order to help keep payroll taxes low.

I especially like that Greespan worked with Daddy Bush to set it up this way -- meaning Junior Bush shouldn't be screwing it all up.

Stupid me.... that was probably the plan all along - let Sonny shake things up when it comes time for our buddies to pay...

Sigh!................

[cthrumatrix]

20. Americans are not told the history of deals --- the Dems are just

as guilty on this.

Maybe that's why they are not talking about this obvious breach of Fiduciary liablity.

[ClassWarrior]

11. That's a great answer to all the SS Bush**it...

The real solution to Bush**'s "SS crisis" is a federal prison term for Georgie**.

If a Radical RW tells you that SS is going bankrupt in 2042 or whatever year he's pulling out of he's ass, tell him if it goes bankrupt it's gonna happen a lot sooner than that, and not because there's anything wrong with the system, but because Bush* the criminal has looted it.

NGU.

[BamaBecky]

12. Thank You for this article - of all that I have read so far - this was the

best!:toast:

[cyberpj]

24. Here's more:

http://sev.prnewswire.com/books/20040518/FLTU00618052004-1.html

(Not related or involved, just researching this mess.....)

[robbedvoter]

13. W is light years passed 100 Watergates -as for historians - "we'll all

be dead by then" as the fearles leader wisely predicted (or planed)

[FloridaPat]

14. Gonzales will write an opinion to default on SS. This guy likes to write.

http://www.tbrnews.org/Archives/a1327.htm

"The buzz down the hall is that if confirmed as Attorney General, Judge Alberto R. Gonzales intends to write an opinion for George Bush, which would let his boss propose legislation to allow the Treasury to default on its obligations to retirees, and also let his boss off the hook, if, as a result, the central banks of the world dump their dollars.

The rumor is that Gonzales intends to focus on the phrase "authorized by law," and to argue that the Constitution does not bar the President from sending legislation to Congress, proposing a default on the $1,686,954,876 of the Trust Fund which is invested in "Special Issue" T-Bills, IOU's written by the Treasury specifically for the Trust Funds. These Special Issue IOU's were issued by the Treasury over the years, to cover the use of working Americans' FICA paycheck deductions to give tax breaks to plutocrat friends of the President.

Not only that, but the Treasury might even be able to recognize this repudiation of its liabilities as income, thereby wiping out all Bush's deficits, and allowing him to claim record budget surpluses in his second term, trumping Clinton's record. (Who gives a damn that the cost is the retirement funds of a hundred million Americans?) "

[slipslidingaway]

22. Interesting article. n/t

[fooj]

15. lets get this out there and then watch Shrub and Co.spin out of control...

I can just imagine what BS they'll come up with...

[cthrumatrix]

17. this deserves a major Media Blast !!!!!!!!!!!!!!!

[cyberpj]

30. I think so too - here's a kick for the night crew..... eom.

[hippiegranny]

21. This is why he has to be so convincing

in order to promote the idea that there is a crisis. There may be a crisis, but it is one of his own making and he is backpedaling furiously in order to cover his bloody tracks.

God, I hope this or SOMETHING, ANYTHING, finally does this small little turd from Texas in.

[cyberpj]

23. Here's a really good petition to STOP/REPAY/COMPLY - spread it around

And maybe we can get a jump on Gonzoles' plans -

Find Out What You Can Do to Help Save Social Security. Check Out the Website of the Citizens' Coalition For Social Security Restitution.

http://restoresocialsecurity.org.hosting.domaindirect.com/

Sign The Petition for Social Security Restitution

By signing the Citizen's Coalition for Social Security Restitution Petition* you are challenging our elected and appointed officials to:

STOP looting the Social Security Trust Fund
REPAY all Social Security Trust funds and all applicable interest by 2008
COMPLY with all laws pertaining to the management of Social Security Trust funds and Trust Fund surpluses

[McCamy Taylor]

26. He will claim 9-11 changed everything, even Social Security!

[cthrumatrix]

27. what doesn't change is the corruption ....can we get a lawyer's opinion ??

[cyberpj]

29. Is there a layer in the house? ............................ eom.

[Cha]

31. I hope it's his

Waterloo!

[Vinnie From Indy]

32. Until the CORPORATE MEDIA Structure is addressed, ShrubCo.

is untouchable. There will be NO Watergate scandal bringing down this president because there are no more Woodward and Bernsteins allowed to print the truth. The truth in modern America is effectively straight jacketed by the corporate media lackeys of the BushCo. regime.

[zann725]

33. Freeze all the personal bank accts. of Shrubco & Halliburton

This is Grand Theft!

[marcologico]

35. More like Bush's Enron. Who the hell is going to prosecute him while

we're "at war," which is probably one reason he refuses to even contemplate pulling out?

p.s. It won't be Hillary that's for sure and she's the one who would get the most sympathy. And it's kind of not Kerry's style, but then he took a lot of shit from Rove, so maybe he'll make it a point of honor, knock on wood.