NPN benefitsBlog

"Secret" Vote on Bush's Social Security Privatization Plan

The press didn't report on it, but President Bush's proposal to privatize Social Security gasped its dying breath almost in secret last Thursday. President Bush had said that reforming Social Security would be a top priority of his Administration during his second term. Readers may recall that despite his rhetoric, President Bush neither submitted specific legislation to Congress nor developed any cogent plan. The Senate voted in its only on-the-record vote 53-46 to defeat a proposal that Bush had quietly slid without debate into the budget proposal sent to Congress last month. It looks like the President’s can't-live-without plan is no more.

The last public mention of the President’s proposal was an embarrassing standing ovation from Democrats in the State of the Union address when he said "Congress did not act last year on my proposal to save Social Security".

The budget amendment proposed starting private accounts in 2010 and proposed diverting some $700 Billion in FICA taxes to pay for the accounts.

© Daniel Scarborough, 2006

NCD Report Critical of SSA Efforts to Promote Employment

Federal rules used to determine who's disabled are nearly 50 years old and need to be updated to reflect economic, medical and technological advances, the National Council on Disability says in a report issued this morning.

Many Americans with disabilities are willing and able to work but remain thwarted from seeking jobs by Social Security Administration guidelines that discourage economic independence, according to a National Council on Disability report issued earlier today. The report , “The Social Security Administration's Efforts to Promote Employment for People with Disabilities: New Solutions for Old Problems” suggests policy and procedural modifications by both Congress and the Social Security Administration to significantly address the continuing number of SSA beneficiaries who never leave the SSI and SSDI rolls, and to increase the number of beneficiaries who enter, or reenter, the United States workforce.

© Daniel Scarborough, 2005

Republicans Want to Cut Disabilty From Social Security Program

Bloomberg.com reports that House Ways and Means Chairman Bill Thomas says Congress should consider a package that includes increasing the retirement age, discouraging early retirement, splitting off disabled and survivors benefits from Social Security. Bush said May 4 that he welcomed efforts by Thomas, who was the driving force behind the passage of $1.8 trillion in tax cuts and a Medicare prescription drug bill in the president's first term.

In response to Thomas' comments, national disability advocates from The Arc and United Cerebral Palsy and Disability Policy Collaboration spokesperson Marty Ford issued the following statement:

We are deeply concerned by Chairman Bill Thomas's idea to separate the retirement, disability and survivor programs from Social Security, which would dismantle the entire system as we know it. Social Security is an insurance program that truly works and the system is the lifeblood for more than seven million Americans with disabilities, their spouses and families. For most, it is their sole source of income.

While little is known about Chairman Thomas's recent idea, any effort to separate the disability program from the Social Security system would likely be harmful for beneficiaries with disabilities. We urge all members of Congress who consider making radical changes to the Social Security system to first understand and carefully consider the impact on the system's beneficiaries.

Millions of Americans with disabilities receiving benefits from Social Security deserve no less.

For more discussion on disability benefits and Social Security reform issues check out the DPC's Social Security Reform Fact Sheet.

Don't Ignore the Children In Social Security Debate

Social Security is the single largest support program for children in the United States Although Social Security is the single largest program that provides support to American children, the debate over privatization has focused almost entirely on changes in benefits for retirees. The National Center for Children in Poverty discusses this issue in a policy brief available at www.nccp.org, which outlines the role that Social Security plays in protecting children in the United States.

While it is true that retirees and their spouses are the largest block of beneficiaries from the program, over 5 million children in the United States benefit from Social Security, either directly as beneficiaries or indirectly as members of households that receive a monthly Social Security check. Of the 48 million people who currently receive Social Security benefits, one in three is not a retiree; one in 15 is a child under the age of 18. “Most of us don’t want to think about it, but all parents are at risk for early death or disability,” said Nancy Cauthen, who is the author of the report and the Acting Deputy Director of the National Center for Children in Poverty at Columbia University’s Mailman School of Public Health. “In the event that tragedy strikes—whether it’s an accident, disease, or the perils of war—Social Security is the best protection that most parents have to offer their children. Unfortunately, the current debate has all but ignored this critical component of Social Security.

Thanks for the info from my friends at the National Center for Children in Poverty. For more
information on NCCP, please visit their website. The National Center for Children in Poverty (NCCP) is a nonprofit, nonpartisan research and policy organization at Columbia University. Their mission is to identify and promote strategies that prevent child poverty in the United States and that improve the lives of low-income children and families. You will find a wealth of resources there.

1977: Bush Warns of Social Security Demise

Turns out that President Bush has been predicting the demise of Social Security for some time. Down here in Texas in 1977, Bush ran against Democratic State Senator Kent Hance for Congress. He lost -- but not by much.

In the campaign, Bush criticized energy policy, federal land use policy, subsidized housing, and the Occupational Safety and Health Administration ("a misuse of power," he said), and he warned that "Social Security would go bust in ten years unless people were given a chance to invest the money themselves". (That would have been 1987)

Check out an old (1999) article A Shrub Grows in Midland in the Texas Observer.

Leaders Highlight President Bush's Controversial Plan

Newswire Press Release: "The biggest crisis facing Social Security is the president's plan to privatize it," said Campaign for America's Future Roger Hickey. "Social Security is President Bush's new 'Weapons of Mass Destruction'. He is manufacturing a crisis and working people across the country are not going to buy a deal that cuts their benefits by a third".

At a campaign-style forum [yesterday], President Bush threatened Republican members of Congress, many of whom are skeptical of his plan to privatize Social Security, by telling them they could be risking their jobs if they don't side with him. Fifty-five percent of Americans believe that investing their Social Security taxes in the stock market is a bad idea, according to a USA Today/CNN/Gallup Poll released today.

Rep. Sander Levin, D-Mich a ranking Democrat on the House Ways and Means Committee, says "our nation's priority must be to protect and provide a secure income to 48 million people, about 30 percent of whom are disabled, widowed or children" and "Opponents will not "simply let the president misuse the language and talk about bankruptcy when the benefits are guaranteed for 40 or 50 years."

Women and Social Security Reform

Kim Gandy, president of the National Organization for Women writes in an op ed in San Francisco Chronicle

Women of all ages must be especially skeptical of the "privatization" con. Social Security is the foundation of women's economic security in retirement and serves as the sole income source for almost one-half of unmarried women --widows, divorced and never-married -- when they retire. Without Social Security, more than half of elderly women would be living in poverty. Women's wages are notoriously low, leading to lesser retirement benefits. Privatization would reduce their future benefits, while yielding minimal returns in their "personal accounts." And if wealthy workers are allowed to opt out of the scheme entirely, it will put an even greater burden on low- and middle-income workers to keep the trust fund healthy.

The rest of the editorial entitled Social Security A 'reform' only Wall Street could love is worth the read.

White House Memo: Cut Benefits

According to today's Wall Street Journal, a private White House memo sent Monday to top conservative allies seeks "to avert a split in Republican ranks" by taking sides in a growing conservative fissure over whether Social Security privatization plans should include drastic cuts in benefits for future retirees. The memo says President Bush will push ahead with his plan to cut benefits, and claims the plan's success would be "one of the most significant conservative governing achievements ever." Still, after Senate Republicans reported being "scared to death" of the political fallout of privatization plans during a private retreat yesterday, the White House responded by "emphasizing the importance of unifying behind whatever plan has the best chance of being signed into law."

This may backfire on President Bush says Newt Gingrich's spokesman Rick Tyler and cause a voter's backlash he noted in a story reported in Bloomberg.com. "There's a lot of conservatives who disagree with'' the administration's position that cuts are needed.

Other press reports quoteCharles Rangel, D-NY: "This memo shows that some in the Bush administration will resort to the worst kind of scare tactics to undermine Social Security". He added that the memo "shows the strategy is to instill panic".

A Better Way That Keeps Social Security

With all the debate about restructuring Social Security some good ideas are floating to the top:

President Bush has a Social Security scheme which costs $2 trillion and would entail massive cuts in promised benefits. There is a better way to improve retirement security in America. In today's New York Times, American Progress's Gene Sperling suggests "a new universal 401(k) that offers all Americans a private retirement account in addition to Social Security, and uses government funds to match contributions made by moderate and lower-income workers." Unlike the president's plan, this would not reduce Social Security benefits. Sperling's plan would include a "dollar-for-dollar match by the government for initial contributions by moderate-income workers and even more for the working poor." The new accounts could be paid for by reclaiming a small fraction of the massive tax giveaways for the rich that Bush pushed through in his first term. (Those tax cuts cost the federal government $100 billion-a-year.) Sperling suggests "a 3-percent surcharge on all income over $200,000 – whether from earnings, dividends or capital gains." Unlike privatization plans – which just shift money around and add risk – the new accounts would actually increase national savings.