President Bush used his State of the Union address last week to broadly outline his proposal to privatize Social Security, but he still has not released a detailed plan. In their Roll Call columns this week, Morton M. Kondracke and David Winston both excused the president from the task of outlining specifics while skewering Democrats for not yet doing the same (“Democrats Yield Social Security Initiative to Bush,” Feb. 7; “Viewers Back Bush, Not ‘Irresponsible’ Democratic Policy,” Feb. 8).
Kondracke and Winston also mischaracterize Democrats’ position by stating that we refuse to admit that Social Security has problems. This is simply inaccurate. Democrats have repeatedly stated that Social Security faces a long-term challenge that must be addressed on a bipartisan basis.
According to the nonpartisan Congressional Budget Office, Social Security will be solvent for nearly 50 years, and even after that, will be able to pay approximately 80 percent of benefits. A problem that should be addressed sooner rather than later? Yes. An immediate crisis? No. We should not rush to undermine the contributions of millions of American workers who have paid into Social Security for years.
To be sustainable, any solution must be bipartisan, and the president has no more willing partner than Democrats to strengthen Social Security. In 1983, Democrats joined with President Ronald Reagan to enact reforms that put Social Security on solid footing for nearly the next 70 years. However, this president, after a perfunctory nod to bipartisanship, has done little to reach out to Democrats while holding several Republican-only meetings at the White House.
Democrats believe a true solution for strengthening Social Security must begin by repaying the Social Security Trust Fund, just as President Bill Clinton did in the 1990s. That step alone would do more for the future of Social Security than the privatization the president has proposed.
In fact, privatizing Social Security does absolutely nothing to address the fiscal challenge facing Social Security. Even senior administration officials admit that “private accounts alone don’t fix Social Security.” Privatization makes the problem worse by draining trillions of dollars from the Social Security Trust Fund.
The price tag for privatization is staggering. Private accounts would slash benefits by more than 40 percent for future retirees, and would add nearly $5 trillion in debt over the next 20 years. The Republican proposal would also impose a “privatization tax” that would on average effectively deduct 70 cents from a person’s Social Security check for every dollar they had in their investment account. Simply put, privatization is unnecessary, unaffordable and unwise.
President Bush has yet to offer a detailed plan that would explain the costs and tradeoffs of his privatization proposal. The budget he submitted to Congress this week also failed to mention the trillions of dollars in debt associated with his plan. And as the Concord Coalition has noted, “establishing personally owned accounts and funding them with borrowed money would send a dangerous signal to the markets that we are not taking our fiscal problems seriously.”