White House Social Security 'fact sheet' is anything
but
February 25, 2005
By Robert Weiner
MY VIEW
Tallahassee Democrat
Last week's White House fact sheet on Social Security
contains anything but the facts. It asserts that by 2027 the
government will somehow have to come up with an extra $200
billion a year, and by 2033, more than $300 billion.
The "Strengthening Social Security for Future Generations"
report goes on to predict that by 2042, "the system will be
bankrupt."
Federal Reserve Chairman Alan Greenspan also overstated the
problem when he told the Senate Finance Committee this month
that benefits would "strain the resources" of Social Security
by 2008 but ignored the ongoing Social Security Trust Fund
surplus through 2052.
None of these assertions is true, yet this unfounded fear
is the basis of the proposal for so-called reform. The Claude
Pepper Foundation, headquartered in Tallahassee, recently
found that 54 percent of Americans think they will not even
get as much as they paid in, and most think Social Security
can't pay more than 20 years of current benefits.
The reality, according to the Congressional Budget Office,
is that the Social Security Trust Fund covers the program
fully through 2052. Perhaps President Bush wants to spend the
annual surpluses for other programs and to cover up the
deficit for all other federal programs - some $500 billion
annually including Iraq war costs.
Moreover, there will be no Social Security bankruptcy in
2042 or even in 2052. President Bush's 2042 figure is based on
the Social Security Trustees' two-year old estimate that the
Trust Fund will be able to cover 73 percent of benefits in
that year. The Congressional Budget Office, reflecting
somewhat more current economic improvements, states that 80
percent will be covered in 2052, more than now, factoring in
inflation. Further economic improvements could stop any
shortfall.
Regardless, even if the CBO or SSA figures were to become
accurate in 40-50 years, Congress could easily then cover all
or part of the difference or make any changes to the program
at that time to deal with any potential shortfall. It would
not be the big deal Bush is making it out to be.
In addition, the baby boomer factor so often cited by Bush
and Greenspan is a short transitional matter. The boomers
aren't booming with babies themselves. Their own parenting
rate of 2.1 per woman (1970-2000) is the lowest rate in
history, according to the National Center for Health
Statistics. This low birth rate will also then represent the
lowest drain on the Social Security Trust Fund
ever.
d
The system will go back into a huge surplus
because of the need to pay fewer beneficiaries. What we really
have is a solvable "blip" followed by a totally secure
system.
Under pressure, the president has altered his words from
just a month ago of "crisis" and "private accounts," changing
them to "problem" and "personal accounts." The camouflage does
not alter this Wall Street give-away proposal, which would put
trillions into the coffers of the brokerage and banking
companies whose executives gave $38 million to Bush's two
presidential campaigns and $6 million to his last inaugural,
according to the Center for Responsive Politics and Public
Citizen.
But the facts are beginning to take hold, and the
"reformers," whom I view as the destroyers, appear to be
beginning to cave. Former House Speaker New Gingrich asserted
the Republicans in Congress could lose the majority over the
White House proposal.
Current Speaker Dennis Hastert added, "You can't jam change
down the American people's throat unless they perceive there
really is a problem."
Now Bush is saying he won't even put forward a formal
proposal; he wants Congress to do it.
Clearly, the president and the reformers are now flailing,
and Democrats were right during the State of the Union speech
to draw a line in the sand and yell "No!" when the president
said Social Security is going bankrupt.
House Democratic Leader Nancy Pelosi, D-Calif., Minority
Whip Steny Hoyer, D-Md., and new Democratic National Chairman
Howard Dean told me they are ready to respond to proposals on
a bipartisan basis, but only after the Republicans change the
hyperbolic mentality and discuss the problem rationally.
There are proposals that Democrats could accept - such as
using a portion of the tax cuts for reducing the Social
Security deficit only if and when there is one, or reinvesting
the current Social Security Trust Fund surplus - $145 billion
a year - into the very kinds of private funds the president
proposes, and use the profit down the road if a trust fund
deficit occurs.
These proposals, rather than imposing benefit reductions or
altering the successful program, would honor Minority Leader
Pelosi's ground rule, Hippocrates' oath, "First, do no
harm."
--------------------------------------------------------------------------------
Robert
Weiner was chief of staff of the House Aging Committee under
Chairman Claude Pepper, D-Fla., director of communications of
the House Government Operations Committee. He now heads a
Washington public affairs think tank.
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