By Ron Walters
(FinalCall.com) – President George Bush has campaigned hard on fixing the Social Security “crisis” by privatizing a portion of the funds (nearly $2 trillion) available in the trust fund, making them available for eligible citizens to set up private accounts they could use in the stock market to grow their retirement benefit. He alarms people, especially baby boomers, by saying that by 2018, Social Security will be running on worthless IOUs and for someone born today, Social Security will not be there for them by 2042. But both of these fuel the big lie that the program is in crisis.
The truth of the status of Social Security has been researched by the General Accounting Office (GAO) and the Congressional Budget Office (CBO). They find that the Social Security Trust Fund has a surplus now and that, by 2018, it will have $5.3 trillion in assets. But by that date, there will not be enough workers contributing from the payroll taxes to the Trust Fund to sustain disbursements from the current account, so money will begin to be taken from the Trust Fund to cover the disbursements. Even under this circumstance, the GAO finds that Social Security will be solvent until 2042, and the CBO says 2052.
The Social Security trustees, a group of people who administer the Trust Fund, say that even after 2052, the system–if nothing is done by then–will be able to pay out benefits at 80 percent of the normal rate, so Social Security will not become insolvent far into this century. What is needed is the moderate fix that Congress occasionally does to the program, not a sledgehammer approach.
What is going on with the Bush administration claiming that Social Security needs a fix right now is a massive con game, because four years could pass and there would still be more than enough time to do something to develop a moderate fix. The crisis mode is only justified by using the rule of “who benefits?” If you follow the money, who benefits will be Wall Street firms and thousands of other investment houses and banking establishments that will manage the millions of new accounts. This will be another financial gain to the folks who paid nearly $600 million for the Bush 2004 election victory and another $40 million for his recent inaugural expenses with the income some of them have gained from the Iraq War cash cow.
Pres. Bush is using Blacks to sell the program, by saying that since Blacks benefit from Social Security less than others, because they don’t live as long, they should welcome the private retirement accounts that enable them to grow their benefit. This is true, since the average age of a Black male in Washington, D.C., for example, is 59 and the early retirement age is 62. It means that half of the Black men in D.C. will not live long enough to collect.
Nearing the end of my career, I am financially secure and knowledgeable about the stock market, but that didn’t help when it took a massive tumble several years ago, from which I am just now recovering, along with everybody else. I could hedge some of my losses, but imagine someone who is unfamiliar with the stock market and makes mistakes in either the size or placement of investments, and who suffer big losses as a result. Who is going to give them their money back? George Bush isn’t.
Nevertheless, Pres. Bush met with a group of Black conservatives at the White House on Jan. 25 and asked them to help sell the program. Some Black ministers who were there and had benefited from the faith-based money, also bought in.
On Jan. 26, Pres. Bush met with the Congressional Black Caucus to continue to push his Social Security privatization con game. I’m wondering who will go for it. The CBC has their own agenda, but it has been blunted somewhat by the strategy of the Bush White House of meeting with Black conservatives first.
The amazing thing is that national press reports have handled these two meetings as though the two groups going in to meet with the President were equal in their representation of Black America. No reporter has indicated that, even though Pres. Bush set up a meeting with Black conservatives to buffer a meeting with the CBC, the agenda of the first meeting has marginal support in the Black community. That is the point.
An outstanding study, “The Social Security Privatization Crisis” by Maya Rockeymore, vice president of the Congressional Black Caucus Foundation, points out that Pres. Bush’s proposals would harm the Black community in a number of significant ways. But, as we can see with the arrangements of the two meetings, what matters is the Bush agenda, not the Black agenda, and I will stand corrected if that is not the case.
(Ron Walters is a professor of Government and Politics at the University of Maryland-College Park.)