Steve Ivester on Social Security

Despite what you might have heard, Social Security is not broken.  President Bush and some Republican candidates are building a major assault directed toward destroying Social Security.  This effort is driven by at least three factors.  The first is the President’s desire to preserve his tax cuts for the very wealthy.  The second is the projection for Medicare Health Care costs as part of the federal budget.  Lastly, it is well documented that the Bush family has, through three generations, had strong ties to Wall Street operatives (who would be a major beneficiary of Social Security Privatization).

Social Security, in its present form, is one of the most successful programs in the history of our nation.  The cost to administer currently runs under 1% of collected funds.  The funds received each year are used to pay ongoing benefits; the balance is used to purchase interest bearing US Government Treasury Instruments.  If no changes are made, calculations show the Social Security Trust Fund will continue growing larger until 2017.  At that point some of the funds will need to be taken to meet annual obligations.  With no changes, the date when the balance in the Trust Fund Accounts reaches zero is calculated to be between 2042 and 2052.  This is what the Bush administration likes to refer to as “going broke.”  This is deceptive.  In fact, at this zero account balance point, some forty years out, money would still be coming in every day from current workers, sufficient to cover up to 80% of the obligations.

The Bush administration has had a stated and aggressive objective to privatize Social Security.  In Nations that have a privatized retirement system, brokers and other advisors are taking 15% or more annually of collected funds.  Compare this to our current 1%.

The AARP calculates that the cost to our society of privatization would be $2-3 trillion.  If the Bush proposals on privatization move forward, current workers will have to pay 3 times:  once to insure promised benefits under our current program, once to fund the private investments and the overhead commissions on those investments, and finally a third time when we must provide a new safety net for failed/exploited worker/investors.

There are many avenues available to update the present Social Security Program.  This and future administrations can stop raiding the social security fund to pay for “off the balance sheet” and non-social-security programs, like paying for the 2000 census.  They can raise the wage cap from $90,000 to $140,000 or allow the Trust Fund Administrators to invest some portion in securities other than specific low-yield Treasury Bonds.

Vigilance is needed to see that social security is not dismantled in the interest of Wall Street.  Many Americans in the future could have difficulty surviving without this promised safety net.  We only need to look at the behavior of the insurance industry in the aftermath of Katrina and the Oil Industry in the current gas crises to see that private industry should not be asked to manage “welfare and safety net” issues.  Should industry profits take precedent over the survival of our senior citizens?

• I will continue opposing efforts to privatize Social Security.  This “gift to Wall Street Cronies” remains a major goal of the Bush Administration, and it will probably continue under any other Republican Administration.  Going back and separating the Social Security Trust Fund from inclusion in the Federal Budget should be looked at, and Congress should have to fund from other sources any “mandated benefits” not going to direct contributors to that fund.

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