The Fight for Social Security Continues
July 1, 2005
Despite months of public appearances by President Bush promoting his signature domestic issue, people remain highly skeptical of the president’s plans to change Social Security.
Bush’s months-long campaign to convince Americans of the need for fundamental change has succeeded in convincing them of the necessity of addressing the retirement program’s funding shortfall. But polls have consistently shown that people do not want to trade their current guaranteed retirement benefits for the gamble of private accounts.
The IBEW and other unions are universally opposed to privatizing Social Security, arguing it would destroy the bedrock retirement program. The IBEW and the labor movement support changes that would shore up the financial viability of the program, provided they do not call for decreasing benefits or increasing the retirement age. Actuaries estimate that Social Security can meet all of its expected obligations until 2052. In fact, the Congressional Budget Office says Social Security is more financially sound today than throughout most of its 70-year history.
Aside from general calls for private accounts, President Bush has not released a detailed proposal of his own, instead leaving it to legislators, while he drops hints as to measures he would support. A USA Today/CNN/Gallup poll released on June 29 shows that approval of Bush’s handling of Social Security has dropped to its lowest point since he launched his campaign. The survey found 64 percent of Americans disapprove of Bush’s Social Security pursuits, down from 43 percent in February. Opposition is greatest among women, seniors and lower income earners.
A vote on private accounts in the House of Representatives could come as soon as some time in July, the Washington Post reported.
"There is no need to rush into a reckless scheme to divert trillions of dollars out of the Social Security trust funds and into private accounts," said AFL-CIO President John Sweeney. "Under the president’s privatization plan, Social Security’s revenue will fall below benefit payouts even earlier than projected and will mean huge cuts in benefits even for those who do not choose private accounts."
A few members of Congress have offered their own plans to address funding shortfalls or introduce private accounts. Last month, Rep. Robert Wexler (D-Fla), introduced legislation to remove the salary cap of $90,000. Currently, yearly earnings exceeding that limit are not subject to the payroll tax paid by workers and employers. The bill has little chance of passage because the House of Representatives is controlled by the Republicans, who have offered their own plan.
The proposal from House leaders calls for diverting Social Security surplus funds as they come in to establish private accounts. Because the government earmarks that income to fund other programs, such a plan would trigger even higher government deficits than exist today. It has been criticized as fiscally irresponsible, and contains no provisions to strengthen Social Security, and still takes money out of the core Social Security system to pay for private accounts.
A Senate plan introduced by Robert Bennett (R-Utah) makes adjustments to benefits according to lifetime earnings. Similar to a plan being considered by President Bush, Bennett would establish a sliding scale that bases cost of living adjustments on wage growth for lowest-income earners and price growth for the higher-income workers. President Bush has signaled support for Bennett’s plan, which would shore up the fiscal state of Social Security but would require benefit cuts.