Social Security Heist
With the Bush Administration, the corruption isn't hidden in the Lincoln Bedroom. It's paraded in your face. On June 18 Treasury Secretary Paul O'Neill lunched with executives of leading financial houses at Windows on the World high atop New York's World Trade Center. His unstated purpose was to help raise $20 million from the companies he regulates, as an initial ante for a private advertising campaign to promote Social Security privatization. When George W. Bush joked during the campaign that the rich were "my base," he wasn't kidding.
The Administration has lurched straight from its tax cut to privatizing Social Security. On June 11 the sixteen members of Bush's Commission to Strengthen Social Security, all handpicked by the White House for their prior support of private accounts, announced that they are unanimously in favor of using part of Social Security taxes to create "individually controlled personal retirement accounts" to be invested in the stock market. Commission co-chairman Richard Parsons, co-chief operating officer of AOL-Time Warner, made the costs clear, saying the panel would consider raising the retirement age and cutting benefits. "For future retirees, you can consider everything on the table," he said.
A coalition of citizen organizations led by the Institute for America's Future and including labor, women's groups, the National Urban League, senior and youth groups, and disability activists immediately denounced the commission members as "astonishingly unrepresentative of the views held by most Americans concerning Social Security's future." A week later two members of the House Ways and Means Committee ran into a Midwestern version of the same citizens' coalition in Missouri when they conducted a "field hearing" to promote privatization. According to the St. Petersburg Times, committee chairman Bill Thomas had envisioned the hearing as an opportunity to foment an "intergenerational clash" between retirees and Generation Xers on Social Security reform. Instead, seniors and young people demonstrated for "intergenerational solidarity" against privatization.
Similarly, O'Neill's airy power lunch was punctuated by a protest rally organized by the AFL-CIO, the Institute for America's Future, the New York Statewide Senior Action Council, the 2030 Center (for young people) and other groups. Joined by Representatives Jerrold Nadler and Jan Schakowsky, the protesters denounced the blatant impropriety of O'Neill's helping solicit private funds to lobby for a plan that will generate billions for financial barons like Morgan Stanley, American International Group, Citigroup and Deutsche Bank, all of whom were expected to be at the lunch.
To repeat what we've said before: Social Security is not in financial trouble now and may never be; just tweak the actuarial assumptions used by the privatizers and any shortfall disappears. But even if more money is needed at some point to pay benefits, sensible solutions are at hand--the simplest being to raise or remove the cap on the amount of earnings on which Social Security taxes are levied. That idea, of course, does not go down well with the high-income crowd that supports Bush.
By the fall, the Bush Administration will hang around the neck of every Republican running for Congress a detailed plan for privatization, and Bush and O'Neill will be publicly identified with the campaign designed to sell this lemon to the American people. In 2002, Americans will have a clear choice to make.