Politics of Fear

Mailbag

Dear Post,

Please inform your readers that the White House is issuing very misleading and false information about the condition of the Social Security program.

On Wednesday, January 19, 2005, Scott McClellan, Bush's Press Secretary, told reporters at a news conference that:

"Right now, younger workers are facing massive tax increases or massive benefit cuts under the current system."

This statement is false on several points:

1) No workers are now facing any tax increases or benefit cuts. Under the worst case scenarios, such changes will not be absolutely necessary until after 2042 -- more than thirty-five years from now.

2) Thirty-five years from now is not right now.

3) The cuts or tax hikes will be massive in the aggregate, but minimal per capita. And that is only if they prove -- over time -- to be required at all. The 2042 projections are "worst case scenario." It is very possible that the trust fund cushion will not run out by then -- especially if the Administration pays back the money it owes the people in the form of Social Security Trust Fund i.o.u.s.

But McClellan repeats the same talking points in order to convince by hyperbole, not by reason.

One such point is:

"Your going to have shortfalls in the system. And it's only going to get worse over time until it goes bankrupt in 2042, according to the Social Security trustees."

These are misleading if not patently false statements. The shortfalls are predicted but not certain, especially since they are not anticipated to begin at the earliest until 2018. Regardless of when they begin, the system is set up to protect workers from suffering reduced benefits because of any hypothetical shortfalls, at least until 2042.

Here is McClellan's and the Administration's biggest lie. They say in 2042, "the system goes bankrupt, according to the Social Security trustees."

The Trustees, however, in their 2004 report, didn't say the system would go bankrupt in 2042. They said:

"Pressures on the Federal Budget will thus emerge well before 2042. Even if a trust fund's assets are exhausted, however, tax income will continue to flow into the fund. Present tax rates would be sufficient to pay 73 percent of scheduled benefits after trust fund exhaustion in 2042 and 68 percent of scheduled benefits in 2078."

Under these conditions, it will be more than prudent to develop contingency plans for reshaping, strengthening and preserving the Social Security system. Then, given the historical playing out of the variables in the economy, an appropriate set of modifications could be rolled out when the FACTS prove it necessary.

Preparing for different contingencies would be a wise method of dealing with the "pressures on the Federal budget," should they in fact arise.

But that is not what the Bush administration is advocating. Yesterday, Scott McClellan told the press that:

"[W]e have a serious problem facing Social Security and we need to act now to solve that problem, because this is a problem that will continue to get worse over time, our options would become much more limited."

The administration is confusing "acting now" with "looking at our options."

Looking at our options is critical. Acting before we look at our options is irresponsible, if not stupid.

But McClellan keeps repeating this mantra to the press:

"It's important that -- or I think significant that members are talking about how we can solve this problem and the need to act now."

The Bush administrations insistence on running "the need to act now" sense of urgency up behind "talking about how we can solve this problem" belies their disingenuousness.

Anyone who has read the Congressional Budget Office, Office of Management and Budget or the Social Security Trustee reports knows that there is no crisis in Social Security.

The crisis will be precipitated by privatization profiteers who want to "act now" before we "look at our options."

This is the tactic the Bush administration used in the 2000 election in Florida, the post 9/11 terrorism scare, the run-up to the Iraq war, and now, here again, the Social Security crisis.

Please tell the readers the truth:

The Bush administration wants everyone to believe there is a crisis so that we will enact hasty and inequitable changes to the system. These changes will greatly favor those in the investment community and will please neo-conservative idealogues who hate government programs and taxes.

The changes the Bush administration is proposing are not to strengthen Social Security. To do that, we must instead act calmly, circumspectly and deliberately, even while the raven's of doom cry, "Crisis! Crisis!" in our ears.

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1/20/04

Dear NY Times, LI Newsday, WS Journal, NY Sun:

I have yet to see evidence that privatizing Social Security will make it more secure for workers or retirees.

And I am very troubled by the unchallenged impropriety of any legal requirement for workers to pay money into private investment accounts. Instead of lending money to our own government, worker/investors will be legally compelled to lend money to private investment firms and brokers.

This will remove the "social" benefit of the current system by privatizing and corporatizing the mechanism, and eliminating the balancing of benefit under the current system.

Most importantly, privatizing Social Security will eliminate the "security" from the system, by opening the system to piracy by corporate raiders and white collar criminals, not to mention the vicissitudes of the financial markets.

Showing the real numbers on Social Security would take a competent economist only a few minutes, but privatizers want the public to invest trillions of dollars of Social Security money based only on their word. That's not a gamble we should take.

Keep the system public. Tweak it as necessary to keep it solvent.

But don't try and sell the American people "privatization" as a scheme to enrich big investors or to default on the Trust Fund i.o.u.s.

1/21/04