Sanders: Bush's Plan to Privatize Social Security Would Be Disaster For Middle Class

Sanders: Bush's Plan to Privatize Social Security Would Be Disaster For Middle Class
1/19/2005

Below is the text of a statement that Rep. Sanders delivered today at a press conference on Social Security. Congressman Sanders was joined at the press conference by Greg Merchildon, Executive Director of Vermont AARP; Elizabeth Petterson, Community of Vermont Elders; Phil Mamber, State Director of Alliance for Retired Americans; Janet Dermody, Vermont Center for Independent Living; and Marie Eddy, Burlington Business and Professional Women.

"Today marks the beginning of my effort to stop the privatization of Social Security and to make sure that government guaranteed Social Security benefits remain strong for our children, grandchildren and great grandchildren. Because the privatization of Social Security will be a disaster for seniors, resulting in a substantial lowering of benefits, I am delighted that joining me today are representatives of 3 major senior organizations in Vermont: The AARP, COVE and the ARA. Because the privatization of Social Security will also be a special disaster for women, I am happy to welcome the Vermont Business and Professional Women here as well. And, because many people forget that Social Security is vitally important not only to seniors but to millions of disabled Americans and to families that have lost their breadwinners, I'm glad that we have representation here from the Vermont disability community to talk about the disastrous reductions in benefits that would take place to the disabled if Social Security were privatized..

"There is a great deal that I and my colleagues in Congress will be saying about this issue over the next several months, but today I just want to focus on a few points:

"President Bush and members of his Administration have been telling the American people, and especially our young people, that Social Security is in crisis, is going bankrupt, and that it will not be there for younger generations when they retire. Sadly, and it really is sad, the President of the United States and his Administration are simply not telling the truth about this issue.

"Social Security is not going "bankrupt," it is not "flat-busted," and non-partisan study after study make that point. It really is not debatable. According to the Social Security Board of Trustees, in its March 31, 2004 annual report, if Congress does nothing (and I certainly hope that Congress will take action) Social Security will pay out every benefit owed to every eligible American for the next 37 years. The non-partisan Congressional Budget Office (CBO) goes even further and projects that Social Security can pay out all of its benefits for the next 47 years, to the year 2052. After that, there will be enough funding available to pay out 80 percent of promised benefits and, with minor adjustments, 100% of benefits. In other words, depending upon the experts you want to rely on, Social Security is not going bankrupt but will be fully solvent for the next 37 to 47 years.

"In my view, President Bush and his extreme right-wing Administration want to privatize Social Security for at least two reasons. First, their right-wing ideology holds the view that almost any form of government program is bad - which is why they are cutting back or moving to privatize not just Social Security, but Medicaid, Medicare, Veterans benefits and the VA, affordable housing, public education and even the U.S. military. Secondly, it is no secret that the President's friends and campaign contributors on Wall Street, who are already investing millions in a major advertising campaign for privatization, will make hundreds of billions if Social Security is privatized by managing the money in these accounts and earning huge amounts in commissions

"What will privatization of Social Security mean for the American people? The evidence again is pretty clear. Privatization will result, depending upon the plan adopted, in approximately a $2 trillion reduction in funds going into the Social Security Trust Fund. This will result in major reductions in Social Security benefits, a substantial increase in the retirement age or, if the federal government borrows money to address the gap, a huge increase in our national debt - which will be left to future generations to pay off. That's what privatization will do.

"If workers invest in private accounts, would some of them make more money than they would have earned by putting money into Social Security. Maybe! It all depends upon the state of the stock market when they invest and the date on which they retire. When the stock market goes up many investors, although not all, do make money. The only problem is that the stock market doesn't always go up. Ask the millions of Americans who have seen their retirement dreams destroyed in recent years because of a declining stock market. Ask the people who invested in stocks on one of the two largest stock exchanges, NASDAQ, in March of 2000 and saw their investments drop by 71% in a year and a half and even today, with some upturn in that market, are still down by 58 %. We all know those people.

"The bottom line here is that Social Security is not, and never has been meant to be, an investment program. If people want to take the risks involved in investing in Wall Street, they have every right in the world to do so. But that's not what Social Security is. Social Security is a social insurance program - and it has worked extraordinarily well for the last 70 or so years. During that time, incredibly, whether the stock market has been up or down, whether the economy was strong or in recession, every eligible American received every nickel that he or she was entitled to. That's a pretty good record, and one reason that our country has gone a very long way in reducing poverty among the elderly and the disabled

"The fact that Social Security is not in crisis and is not going bankrupt does not mean that the Congress should do nothing. In my view, over the next several years Congress should take a hard look at Social Security to make sure that it is strong and solvent not just for the next 40 or 50 years, as it is now, but for the next 75 years - the period of time that one usually projects out for."

http://bernie.house.gov/documents/releases/20050119173741.asp