Social and Secure
If a presidential candidate makes a high-blown campaign promise but doesnt have the foggiest idea how to fulfill it, the first step when he gets elected is to appoint a commission. And so, here we go again.
President Bush has appointed a Social Security Commission. Usually, you unveil the commission in a grandiose event at which every speaker uses the word bipartisan. Not this time. The new Social Security Commission had an eligibility testto get named, you had to agree with the President on private investment of Social Security funds. One White House aide spun it rather neatly: We wanted a commission that would reach a conclusion.
I cant believe we put up with this stuff! If President Clinton had tried this, the Heritage Foundation would have had a fit.
Its going to be up to people like us in the IBEW to impose a democratic (note the small d) solution, because the concern about the solvency of the Social Security Trust Fund is real. An awful lot of babies were born in the United States between 1946 and 1964 and when those baby boomers start retiring in the decade just ahead, the Social Security surplus gets depleted. Prior to the Bush tax cut, the projections were that the fund goes broke sometime after 2040, when all of the baby boomers are counting on the next generation to support them, just as they supported the generation born before World War II. Now, because Bushs numbers on the impact of the tax cut were wrong and because the economy is slowing, Social Security and Medicare will be hit to pay his bills and will go broke sooner.
So we have a responsibility to listen attentively and appraise carefully the methods of keeping Social Security solvent. But we can draw our line in the sandand do not have to listenwhen Bushs commission members or other business executives start talking about raising the retirement age. Age 62 may seem young for retirement if youve spent your entire life running someone elses corporation and laying people off, but not if youve worked for a living.
Similarly, proponents of private investment can spout tons of figures on how much more you could have earned in your working life by putting the equivalent of your Social Security payroll taxes in the stock market. Not if you invested in Studebaker, Penn Central, Eastern Airlines or any of the dot.com companies now going belly up.
Theres a world of difference between social insurance and private investmentand were determined to keep the social insurance features intact in Social Security. Social insurance protects you and your dependents in case of disability during your working life. Similarly, the system must retain the social insurance principle of a guaranteed floor for everyone for retirement. Private accounts must never be substituted for the defined benefits the system currently provides.
Eliminating Social Securitys cost-of-living increases was a goal of the reformers in the 1990s when inflation was lowbut all of us above 10 years of age know economic times change and protection against inflation is essential for retirees. One change has been that the recent stock market performance has dimmed the glory story told by the proponents of privatization.
The White House announcement of a Social Security Commission seemed to have one tiny grain of good newsa pledge by the President not to raise payroll taxes. But the commission members he named are committed to the carve out approach, which means funding privatization by carving money out of the amount currently paid in payroll taxes.
Well be watching these birds, and keeping you posted. It seems inevitable we will need to contact our Representatives and Senatorspresenting our point of view to them and presuming well get a more democratic decision than we got in the formation of the Bush commission.
Jeremiah J. O'Connor