PITTSBURGH — “If it ain’t broke, don’t fix it.” That’s the message that hundreds of thousands of seniors, students, clergy and union members have sent to Republicans, who have been out on the stump to sell the privatization of Social Security.
As the smoke cleared and Bush administration officials circled their wagons, schemes surfaced to cobble together a compromise — some way for Bush to save face. The best spin Republicans could put on the situation is that the American people have a healthy “skepticism” regarding the proposal to replace Social Security with private accounts invested in the stock market.
Unions have adopted the slogan, “Not one inch” in their efforts to save Social Security from Wall Street, whose crash in 1929 spawned the social insurance program in the first place. Already, the New Mexico and Nevada legislatures have enacted resolutions rejecting Bush privatization efforts. (See National Clips, page 4.)
“Scrapping the cap” on Social Security is a common thread running through retirees’ proposals to adjust the fund to meet the needs of the 66 million baby boomers soon to leave the workforce. Currently Social Security taxes (FICA) are capped at $90,000. Once a worker reaches the $90,000 threshold, the 6.2 percent tax ends, as it does for the employer, who also pays 6.2 percent.
According to the Economic Policy Institute (EPI), eliminating the cap would virtually guarantee Social Security’s solvency for the next 75 years, without raising the rate of FICA taxes.
The EPI said any privatization scheme or hybrid, such as one where only 4 percent of Social Security revenue would be diverted to private accounts, would have a devastating effect on state economies. The national average, according to the EPA, is 16 percent of the U.S. population depends on Social Security for their income. The scheme to salvage some form of privatization would hit some of the country’s poorest states the hardest, including Mississippi and Kentucky, where a quarter of the population receives disability benefits.
As the debate swirls, only the Bush administration appears to insist on privatization, in some amount or form, as a pre-condition. For Democrats and a few Republicans, taking revenue out of the system and giving it to Wall Street speculators is a deal-breaker.
Currently, there are three workers for every one retiree. By the time the baby boomers hit Social Security age, the ratio falls to 2-to-1, according to AARP figures.
The former commissioner for Social Security, Kenneth Apfel, warned against believing doomsday claims about a crisis in Social Security, especially because today’s workers are more productive, earn higher wages and could stay in the workforce longer. “It isn’t going to be Armageddon,” he said.
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Calif. legislators come out swinging
CASTRO VALLEY, Calif. — An overflow crowd jammed the Public Library here Feb. 26 to hear Rep. Barbara Lee (D-Oakland) call Social Security the country’s “most effective anti-poverty program,” and to emphasize that the system is solvent and will continue to be so long into the future.
Lee drew resounding applause as she called President Bush’s proposed privatization “a risky scheme” aimed at making more profits for money managers and Wall Street.
Scott Frey of the National Committee to Preserve Social Security and Medicare called Bush’s plan “appalling.” He warned that under it, both those who opted for private accounts and those who did not will face huge losses of benefits. Frey emphasized that people of all ages receive Social Security benefits, with nearly 40 percent of recipients being surviving spouses and children and the disabled.
The Castro Valley gathering was one of over 100 such meetings around the country last week, to galvanize opposition to Bush’s scheme.
In San Francisco, Feb. 23, Rep. Nancy Pelosi (D-San Francisco) called Bush’s plan a costly “diversionary tactic” and a blatant effort to “divide the generations.”
Saying that Bush has wrongly claimed Social Security is in crisis, Pelosi said that in private meetings, the president had acknowledged that no crisis exists.
Earlier last month, California Sen. Barbara Boxer warned seniors, “If you’re 55 and older, you can’t count on a thing. Don’t breathe a sigh of relief. Don’t pull the covers over your head.”
— Marilyn Bechtel (email@example.com)