Schumer, Baucus Call On Bush To Drop Social Security Privatization, Dems Won't Fall For Bait And Switch

SCHUMER, BAUCUS CALL ON BUSH TO DROP SOCIAL SECURITY PRIVATIZATION, DEMS WON'T FALL FOR BAIT AND SWITCH

Schumer: New Republican Social Security Proposals from Senators Bennett, DeMint, and House Members Are Little More Than Privatization-Lite

President Has Lauded Varied Proposals on Social Security, but Not Taken Privatization off the Table

U.S. Senators Chuck Schumer (D-NY) and Max Baucus (D-MT) today urged President Bush to take privatization off the Social Security reform table in order to begin meaningful discussions on Social Security reform. Ahead of formal legislative introductions by Sens. DeMint and Bennett, Sens. Schumer and Baucus will again repeat calls on the Republicans to take privatization off the table and negotiate in good faith with Democrats on Social Security reform.

Schumer said, "The Republicans are playing a shell game, it doesn't matter whether they are privatizing Social Security using payroll taxes or using the Social Security surplus, it is still wrong. Republican proposals are going to cut benefits and reduce solvency of Social Security. They can twist themselves into a pretzel anyway they want, and say that they're protecting the Social Security surplus (DeMint), or offering a plan without accounts in order to restore solvency (Bennett). But the truth is that until the President himself takes private accounts off the table, he's not going to find Democrats who are willing to work with him."

Baucus said, "Both of the Social Security plans being talked about today could be part of the bait and switch game. I've said it before and I'll say it again, private accounts need to be taken off the table. We need to be strengthening Social Security, not weakening it. I cannot and will not support a plan that would create huge benefit cuts or add trillions of dollars to the debt. Once privatization is off the table we can work together on a common sense solution to strengthen Social Security for future generations."

The Republicans earlier announced their intent to use a "bait and switch" strategy to enact privatization:
-- "Senate Republican leaders are considering whether to seek Democratic support for Social Security legislation without the personal accounts sought by President Bush, aiming to restore them later."
(AP, 4/05)

-- "This in no way should be interpreted to mean that the president is backing off of personal accounts," White House spokesman Trent Duffy said. "He is not." "He is committed to…personal-accounts…"

The DeMint privatization bill has many of the same flaws as Bush's plan:

1) It cuts benefits to pay for private accounts: the proposal's privatization tax would cut guaranteed benefits for those who contribute to accounts, even if the value of the accounts collapses.

2) It would increase debt and interest costs that future taxpayers will have to pay.

3) It doesn't even pretend to extend Social Security's solvency and actually would make Social Security's solvency problem worse. The administrative costs in the first decade alone are likely to be about $25 billion, accelerating insolvency by about a year.

4) While claiming to protect Social Security surpluses, it actually raids Social Security to pay for private accounts. The Republicans have spent the last 4½ years spending Social Security dollars for their tax breaks and new spending. Now they want to use them for private accounts. Democrats have proposed a real way to protect surpluses: adopt pay as you go rules that block Congress from spending surpluses for new tax breaks for spending. The Republicans have repeatedly blocked that proposal.

"All of these privatization plans are really Social Security phase-out plans, and there isn't a single Democrat who will go along with a phase-out of Social Security. The House bills, and the bill from Senator DeMint, are posed as different from the President's plan because they limit amount of money that can go to the accounts to the amount of the Social Security surplus every year. They make it sounds like that's a good thing. But it's still the same basic idea - they are taking money that would be used to pay future benefits and setting it aside for private accounts," Schumer continued.

http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/2005/PR41738.SSBaucus.062205.html