The Common Good
March 2005

Privatizing Social Security

by Harry C. Kiely | March 2005

If a lie is repeated often enough, it becomes accepted wisdom.

How many times can President Bush get away with crying wolf?

How many times can President Bush get away with crying wolf? First came the "weapons of mass destruction." Congress believed him and committed our nation to a tragic war in Iraq, based on lies and deception. Then there were the massive tax cuts for the rich, guaranteed to get the economy going again. The result? The budget surplus was traded in for a giant deficit to be passed on to our grandchildren.

With Social Security, the president is at it again. The whole system is moving into crash mode, he says, so we need to take radical steps to rescue it. (Question: Why did the president wait until after the big tax cuts to go into panic about Social Security?)

Let’s get one fact straight right now. Social Security is not only not in jeopardy, it is in fact healthy and robust. The authority for this assertion is none other than the nonpartisan Social Security trustees, whose job it is to monitor this vital program. According to the trustees, the Social Security trust fund can pay full benefits through 2042. The Congressional Budget Office, also nonpartisan, goes beyond that and sees full solvency through 2052. Long before reaching those projected deadlines, minor course corrections can be applied and assure the Social Security program for an indefinite period.

If we pay attention to our common life, we know that if a lie is repeated often enough, it becomes the accepted wisdom. Such has been the case with Social Security. For 20 years, the Wall Street investment industry has been disseminating reports about the imminent shortfall of Social Security when the baby boomers start retiring. So pervasive has been this disinformation campaign that reporters for the mainstream media treat it as common knowledge. Today, many workers under age 40 believe Social Security will not be there for them when they retire.

WHY WALL STREET’S sudden interest in ordinary people, including the millions who have been kept out of poverty through Social Security support for seven decades? The answer is simple: profit. Servicing the accounts made possible by partial privatization would net the investment firms many billions of dollars.

But privatization would be a disaster for the Social Security program. As it now works, Social Security is a social insurance program that guarantees an annual income for life for retirees and for the disabled. Conversion of even part of the present program to an investment program would automatically cut back on the guarantee and subject the investment portion to the risks of the market. The purpose of Social Security is to provide not wealth but security. Most people on Social Security say they like it that way and that they would not favor risking the loss of that guarantee.

A warning was provided last year when the Medicare prescription drug plan was rammed through Congress with virtually no debate. That bill was written mostly by lobbyists for the pharmaceutical companies and HMOs. The legislation for "saving" Social Security inevitably will be strongly influenced by companies that will profit through its conversion.

The bottom line: If we want to assure that Social Security will continue on its present path of providing a guaranteed secure income for retirees, survivors, and the disabled, we are going to have to fight for it. The "guarantee" is no longer guaranteed.

Harry C. Kiely, a United Methodist clergy, is a retiree who has a vested interest in the continued health of Social Security.

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