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Social Security's Future: At Stake on November 2

President Bush has stated many times that if he's elected to a second term, one of his top priorities will be to replace a portion of Social Security with private investment accounts. He re-stated this goal in his acceptance speech at the Republican National Convention, which laid out his vision for the next four years.

AFSCME is strongly opposed to Social Security privatization. While the union has always advocated for workplace savings plans that help workers prepare for retirement, we believe these plans should supplement Social Security and pensions, not replace them.

RISKY BUSH PLAN. International Pres. Gerald W. McEntee considers Social Security benefits to be "the food and rent money" for most seniors. "Responsible people don't put their food and rent money at risk — not at the race track or in the stock market," he said. "President Bush wants to introduce risk into a system that's supposed to protect us from it."

Bush's agenda was evident in the recommendations of his 2001 Social Security commission, which consisted entirely of privatization advocates. "They knew that establishing private accounts would cost nearly $2 trillion," McEntee noted, "so they had to come up with all sorts of ways to pay for it. Recommendations included raising the retirement age and cutting benefits by up to 45 percent for future retirees."

Even with future benefit cuts, the Commission acknowledged that privatization schemes would still require hundreds of billions of dollars, though they never told us where they'd get the necessary funds.

PAY AS YOU GO. "Bush claims that current retirees would be protected in the switch to private accounts, but it's hard to imagine how that would be possible," McEntee emphasized. "After all, the payroll contributions of today's workers pay benefits for today's retirees. If you siphon off some of those contributions for private accounts, it will eat into the money needed to pay current benefits."

Bush's opponent, Sen. John Kerry, agrees with McEntee. In a speech he made in West Palm Beach, Florida, in September, Kerry called the Bush plan for Social Security "a rip-off." It hurts seniors, he said, by cutting benefits, "and it hurts our economy by increasing the deficit. The truth is, the only people helped by George Bush's Social Security scheme are the special interests."

WINDFALL FOR WALL STREET. Kerry cited a recent study by Chicago Business School Professor Austan Goolsbee, which found that financial institutions, rather than seniors or working people, have the most to gain from the Bush agenda. According to the study, the financial services industry would receive an enormous windfall by being able to charge management fees on every private investment account created by Bush's Social Security plan.

The Wall Street windfall is estimated to be over $940 billion. According to Kerry, that money could be used instead to shore up the Social Security Trust Fund and protect benefits for current and future retirees.

KERRY OPPOSES PRIVATIZATION. "John Edwards and I would not raise the retirement age, cut benefits, raise taxes on the middle class or privatize the system," Kerry said, noting that the best way to ensure the future of Social Security is "to restore fiscal discipline in the federal budget, jump-start the economy and invest in long-term productivity." More people working at higher pay means more money in the Trust Fund to pay benefits.

Pres. McEntee thinks John Kerry has the right answers for Social Security. "George Bush squandered America's budget surplus with a tax cut that cost three times as much as we need to solve the eventual shortfall in Social Security (a 25 percent shortfall after 2042). And he's raided Social Security's reserve fund every year to fund his budget proposals — a total of $507 billion to date.

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