Bush to Privatize SS

Kerry Campaign: Bush Exposed -- Social Security Privatization is on the Way

WASHINGTON, Oct. 17 /U.S. Newswire/ -- The Kerry-Edwards campaign today released the following: "George W. Bush Exposed: Social Security Privatization is on the Way": Though George W. Bush does not often admit to voters that his Social Security plan is a privatization scheme, a new report shows he apparently does tell the Republican National Committee's major donors. Maybe that's because they'll be the ones to benefit from privatization while seniors will see their benefits cut and the plan will add $2 trillion to the deficit.

BUSH'S PRIVATIZATION SECRET:

DON'T SAY IT: "Privatization is a False and Misleading Word." Bush aide Steve Schmidt instructed, "'Privatization' is a false and misleading word insofar as it is being used by Democrats to describe Republican positions on Social Security. It is very important that we not allow reporters to shill for Democrat demagoguery by inaccurately characterizing 'personal accounts' and 'privatization' as one in the same." (Slate, 9/6/02)

YET BUSH TELLS BIG DONORS AT THE RNC: Privatizing is On the Way.

"'I'm going to come out strong after my swearing in.' Bush said, 'with fundamental tax reform, tort reform, privatizing of Social Security.' The victories he expects in November, he said, will give us 'two years, at least, until the next midterm. We have to move quickly, because after that I'll be quacking like a duck.'" (New York Times, 10/17/04)

BUSH'S PRIVATIZATION SCHEME:

George Bush's Economic Report Of The President 2004 says that his Social Security plan would drain $2 trillion from Social Security over ten years, increasing the deficit. According to George Bush's Economic Report of the President 2004, "personal retirement accounts widen the deficit by design." In total, the Social Security plan presented in the Economic Report of the President (Plan No. 2 from the Presidents Commission to Strengthen Social Security) would increase the deficit by $2 trillion over ten years.

This plan proposes individual accounts that average about 2 percent of payroll (technically, 4 percent of payroll up to a maximum $1,000 annual contribution). (Council of Economic Advisers, Economic Report of the President 2004, pp. 143 and Social Security Administration, Office of the Actuary, "Estimates of Financial Effects for Three Models Developed by the President's Commission to Strengthen Social Security," January 31, 2002)

CBO estimates that Bush's plan will force benefit cuts (even when you include the value of the individual accounts) that grow from 23 percent to 45 percent. According to CBO, the President's plan "would reduce expected retirement benefits relative to scheduled benefits, even when the benefits paid from IAs (individual accounts) under CSSS Plan 2 are included....For example, benefits for the 1980s birth cohort would be 30 percent lower, and benefits for the 2000s cohort would be 45 percent lower." (CBO, "Long-term Analysis of Plan 2 of the President's Commission to Strengthen Social Security," 7/21/2004, page 15 and Table 2)

A $940 Billion Giveaway to Financial Institutions: George Bush's Social Security plan will provide a $940 billion giveaway to financial institutions. "Creating individual accounts in the social security system would lead to a massive increase in payments of financial fees to private financial management companies." (Austan Goolsbee, University of Chicago, 9/04