George Bush is getting set for another attempt to raid Social Security by deliberately and falsely connecting the retirement program with the crisis facing health care in the U.S

One of his top priorities for after the November elections is “the unfunded liabilities inherent in Social Security and Medicare.” The president continues, “Baby boomers are retiring, fewer people are paying into the system, and the system is going broke.”

He’s lying about Social Security. The Trust Fund will be able to pay full benefits for the next 40 years.

Medicare is a different story. A separate trust fund pays for Medicare Part A hospital insurance (HI), while Part B and the new drug plan (Part D) are paid for by general revenues and by ever-rising premiums paid by the recipients. The Bush-appointed trustees say the Medicare HI Trust Fund will run out in 2018. Even so, it will not be until 2012 that the reserves are low enough to require that Congress take action.

The administration game plan is to lump Social Security with Medicare and claim there is a crisis with out-of-control “entitlements.” Most of the media plays along, never challenging the administration spin, and running editorials calling for benefit reductions to “save” the programs.

But the real situation is summed up by Dean Baker of the Center for Economic and Policy Research: “Medicare is a big problem because U.S. health care costs are projected to explode, which means that Medicare costs will explode. The moral is fix the health care system. Social Security is not a problem.”

Health care costs an excuse to privatize Social Security

Instead of fixing the health care system, it is clear that the Bush administration, along with Republicans in Congress, is using it as an excuse for a new assault on Social Security. Here’s what they’re trying to do:

• Divert part of payroll taxes into private accounts, providing a potential bonanza for Wall Street fund managers.

• Cut future Social Security benefits. This will allow them to continue using our payroll taxes to pay for the military buildup and tax cuts for the rich.

• Cut spending on Medicare, effectively pushing costs onto patients and health care providers.

The congressional elections this November will be critical. Robert Novak comments in his Inside Report, “If Democrats gain control of the House in this year’s elections, Bush’s tax and Social Security proposals will face a cold reception in the House Ways and Means Committee headed by Rep. Charles Rangel.” Rangel is a progressive Democrat and a member of the Congressional Black Caucus.

November surprise?

After the November elections, Republicans are likely to mount another full-scale campaign to scare Americans into thinking that Social Security is “going broke.” But the real budgetary problems lie with a broken health care system and a huge deficit, caused by military spending and tax breaks for the rich. Instead of changing those disastrous policies, Republicans hope to continue to finance them by “fixing” Social Security on the backs of workers and retirees. Their key tactic is to present problems with healthcare and the budget as an “entitlement” problem. They will then demand that Democrats join in a bipartisan effort to “save” Social Security.

Let’s keep our eyes on the facts.

• Social Security is not in trouble. This year, the Trust Fund will take in $177 billion more than it will spend. It will be able to pay full benefits for far longer than anyone can make accurate predictions. If rich people paid the same payroll taxes as the rest of us, we could actually afford a big increase in benefits.

• Funding Medicare will become increasingly difficult, although it is not an immediate crisis. This problem cannot be solved without a comprehensive, national health care system. The best bet is HR 676, the “Medicare for All” bill, introduced by Rep. John Conyers with 77 co-sponsors. The Republicans have blocked this bill from being heard.

• The U.S. faces a long-term problem with excessive budget deficits. In the future, this could make it difficult to repay the money that the government owes to many creditors, including the Social Security Trust Fund. The administration “solution” is to stiff Social Security. A real solution would be to make the rich and the big corporations pay their taxes, end the war in Iraq, and wind down the military budget.


Art Perlo
Art Perlo

Art Perlo lived in New Haven, Conn., where he was active in labor and community struggles. He did research and writing on economic issues in Connecticut, including work with the Coalition to End Child Poverty in Connecticut which helped pave the way for the movement for progressive tax reform in the state. He wrote on national economic issues for the People's World and was a member of the CPUSA Economic Commission.