The Biggest Deal
Robert Dreyfuss, in The American Prospect, on the funding behind lobbying the drive to privatize.
Making Social Security Secure
Slate "committee of correspondence" including Herb Stein, Henry Aaron and others.
Economist James K. Galbraith in The Texas Observer:
Here is what the President said:10/16“Let us proclaim to the American people we will balance the budget, and let us also proclaim we will do it in a way that preserves Medicare, Medicaid, education, environment, the integrity of our pensions, the strength of our people.”Does this sound like a promise to protect Social Security to you? To me, it sounds like a promise to “reform” it.
The financiers have been ogling the Social Security Trust Fund for years now. Privatize it! they say. It will be more efficient! Earn a higher return! What they mean is: let us get our sticky fingers on the cash flow.
In simple terms, privatization of Social Security probably means that some part of your payroll tax gets dumped into a mutual fund. You will pay a manager to invest it for you. He will make a fantastic income for some of the easiest work on the planet. Political scientist Thomas Ferguson has recently written, in Le Monde Diplomatique, that Clinton and the Democrats have been losing investment bank political contributions since 1994. This giveaway would almost surely get them back.
Ah, but isn’t the Social Security System in crisis? Isn’t tottering on the edge of bankruptcy? It absolutely is not. As the great economist Robert Eisner wrote in the Wall Street Journal last week, just a few accounting changes, long overdue, could end such talk for decades.
The problem is greed, pure and simple. Social Security is a rich target. I am not making this up: there is other evidence that preparations for a bipartisan Social Security “rescue” after the election are underway. That sly euphemism, “the integrity of our pensions,” was not accidental.
In some ways, Social Security might be safer under Bob Dole. Dole is, after all, an elderly, disabled man. He is a conservative Republican, but he has an honorable track record on Food Stamps and other safety net issues. More important, if Dole became President, the Democratic Party might come back into existence. Treasury Secretary Robert Rubin from Goldman, Sachs would leave office. Social Security would have real defenders once again.
The Second Clinton-Dole Presidential Debate
MR. FLECK: President Clinton, my name is Jack Fleck. I'm retired Air Force pilot. Sir, it's officially forecast that our annual Medicare and Social Security deficits are measured in the trillions of dollars next century. Depending on who you listen to, Social Security will be bankrupted in either or . I feel this is grossly unfair, especially to our younger generation who are losing faith in the system. My question is this: Assuming you agree that our entitlement programs are on an unsustainable course, what specific reforms do you propose?More:
CLINTON: First of all, there are two different things. Social Security and Medicare are entirely different in terms of the financial stabilities. Let's talk about them separately. Social Security is stable until, as you pointed out, at least the third decade of the next century. But we'd like to have a Social Security fund that has about 70 years of life instead of about 30 years of life. What we have to do is simply to make some adjustments to take account of the fact that the baby boomers, people like me, are bigger in number than the people that went just before us and the people that come just after us. And I think what we'll plainly do is what we did in 1983 when Senator Dole served, and this is something I think he did a good job on when he served on the Social Security commission and they made some modest changes in Social Security to make sure that it would be alive and well into the 21st century. And we will do that. It's obvious that there are certain things that have to be done and there are 50 or 60 different options, and a bipartisan commission to take it out of politics, will make recommendations and build support for the people. Medicare is different. Medicare needs help now. I have proposed a budget which would put ten years on the life of Medicare trust fund. That's more than it's had a lot of the time in the last years. It would save a lot of money through more managed care, but giving more options, more preventative care and lowering the inflation rate and the prices we're paying providers without having the kind of big premium increases and out-of-pocket costs that the budget I vetoed would provide. Then that would give us ten years to do with Medicare what we're going to do with Social Security; have a bipartisan group look at what we have to do to save it when the baby boomers retire. But now we can, we ought to pass this budget now and put ten years on it right away so no one has to worry about it.
DOLE: Well again, if you're somebody thinking about the future, I think it's fair to say that it'll be -- we'll work it out. This is a political year, and the President is playing politics with Medicare. After this year is over, we'll resolve it just as we did with Social Security in `83. It's a nonpartisan commission. Ronald Reagan got together with Tip O'Neill and Howard Baker, two Republicans and one Democrat. They appointed a commission I was on that commission. We resolved, we rescued Social Security. We suggested -- I think it has been over a year ago now -- we do the same with Medicare, and the White House called it a gimmick. Now last week I guess it was Donna Shalala said well we'll cut Medicare a hundred billion and appoint a commission. It will probably have to be done by a commission. Take it out of politics. I think if I were a senior citizen I would be a little fed up with all these ads scaring seniors, scaring veterans and scaring students about education. When you don't have any ideas, you don't have any agenda, and all you have is fear, that's all you can use. We have ideas in the Dole-Kemp campaign and we will rescue Medicare as we did Social Security.
MS. SIEFERT: Iris. Senator Dole, we talked about Social Security for us baby boomers. But shouldn't we be saving and investing for our own retirement as well? Are you planning any incentives to encourage us to take care of ourselves rather than to rely on the government and on Social Security when we retire?November
DOLE: Well, we have in our economic pack, -- individual retirement accounts where we think it will encourage savings. You can also use those accounts for health care or education or a first home. We're doing that precisely, and I think one thing sooner or later we're going to have to consider is take a look at the Social Security system. Because we've got a lot of people advocating we don't want to put our money into Social Security. You have to be very careful of that because you have to protect the people who are already in the pipeline. It's something you might consider. I'm not suggesting it will be done, but at least we ought to look at it. It's been looked, When I was chairman of the finance committee which handled Social Security we looked at all these options, and one thing we've got to make certain, when I used to go home my mother would tell me all I've got is my Social Security, don't touch it. And we didn't touch it. We preserved it. And I'm an optimist. Your your Social Security is going to be there when you retire. We will fix it. It will probably happen in the year 2012 or 2015. In 1983 we thought we had a 75 -year fix. It didn't work. Much, much less, but at least we fixed it for some time and 37 to 40 million people get their checks on time. So we need to preserve the system. And we need to make it stronger. But we also need to look at some options, whether or not we -- depending on what the options are. In fact, they have got a commission right now in Congress, a bipartisan commission, looking at all the different options they will present to the next Congress. so I think we will wait, see what they present, take a look at it.
CLINTON: Iris, this is one where we have some agreement, I think. Only about half the people in this country have pension plans. And Social Security is not enough for a lot of people to live on, or at least is not enough for them to maintain anything like their previous lifestyle. So we've got to figure out how are we going to have more people with pension plans, and pension coverage has been declining as more and more people work for small businesses and fewer people work for big businesses. So what, what is in my plan and I think it's almost identical in Senator Dole's plans is we make more people eligible to save in an IRA and let couples, married couples save more and then they could withdraw from it tax-free if they needed to, for medical emergencies or buy a home or education, also save to supplement retirement. In addition to that, we just passed a sweeping business reform that makes it easier for small business people to take out 401 K plans for themselves and employees and much easier for employees to carry it from job to job. My best friend from grade school is a computer software salesman and he told me last time he changed employers it took him nine months to figure out how to transfer his 401K plan. Now none of that will happen anymore. I hope over the next ten years you will see a big increase over the percentage of people that have pension plans, plus a secure Social Security system.
The Great Social Security Scare
Jerry L. Mashaw and Theodore Marmor write in The American Prospect.
The end of Social Security as we know it?
Robert Dreyfuss, in Mother Jones, on the drive to privatize.
In the same Mother Jones issue, Theda Skocpol asserts conservatives unsuccessfully fought for a more poor-centric version of Social Security in a bid to pre-empt its long-term middle-class appeal.
Local Solutions to a National Problem
Local prototypes for Social Security reform.
Social Security: From Ponzi Scheme to Shell Game
Michael Kinsley in Slate.