President Bush is selling his plan to privatize Social Security the way he sold the war in Iraq, by creating fear and paranoia, repeating to citizens that Social Security is on the brink of collapse.Yet Bush?s shaky plans of privatization would only increase the national debt, gamble away people?s benefits and savings within the stock market, and provide little security for low-income families while giving more breaks to the wealthy elite.
If the Senate and the House passed Bush?s Social Security plan, then Americans would be allowed to place money into the stock market and private accounts. At the price of privatization, corporations would only grow wealthier and people would throw their savings and money into stocks, which aren?t always reliable. Just remember the Enron scandal.
Bush?s State of the Union address at the end of January focused on his desire to privatize Social Security. He promised that his plan was a better deal, and that Social Security is in serious trouble and could expire by 2042. “If you?ve got children in their twenties, as some of us do, the idea of Social Security collapsing before they retire doesnot seem like a small matter,” he said in his speech. “We must ensure that lower-income Americans get the help they need to have dignity and peace of mind in their retirement.”
Yet Bush?s privatization plan would provide little security to lowincome households. Under Bush?s plan, people making low wages may have to withdraw the money they invested into stocks and private accounts during their working years in order to survive until retirement. The privatization plan would also leave them with fewer benefits than people receive today and little money for their children and families to inherit.
On the other hand, wealthy people would have more money to invest into private accounts, more money to live off of in retirement, and far more to leave to their children and families than people with low incomes. Privatization would give another break to the elite, just like Bush?s tax cuts.
“Higher-paid people, by definition, would have bigger private Social Security accounts and less need for annuity income than lower-income people would,” said journalist Allan Sloan of Newsweek. “This gives them a far greater chance of having something left to hand down to their heirs, and gives lower-paid people less chance.”
Privatization of Social Security would also create massive borrowing and spending, which would drastically increase the national debt. In the first 10 years of privatized Social Security accounts, the U.S. government would have to borrow $1.3 trillion from other countries, according to the Washington economic group Center on Budget and PolicyPriorities. Over 20 years, the borrowing would skyrocket to $4.5 trillion, the same study found. The United States can not afford such massive spending with a national debt that is already in the trillions and impossible to pay off.
Though Bush may believe he has “political capital” because of the election and think that he can propose such radical conservative programs, recent polls have found that a majority of Americans do not support the privatization of Social Security.
A Newsweek poll done in the beginning of February found that 56 percent of U.S. voters believe that privatizing Social Security is too risky. A CNN/USA Today/ Gallup poll conducted last month found that only 40 percent of U.S. citizens believe it is a good idea to privatize Social Security, while 55 percent think it is a poor idea.
Of course, the Democrats are united against the privatization of Social Security. Social Security is symbolic of the New Deal era and the time of Franklin Roosevelt, one of the Democrats?heroes. Perhaps more importantly, Republicans are divided on the issue, and many Republicans do not want to privatize Social Security either.
“Right now, to be very candid with you, we don?t have broad Republican support, let alone bipartisan support for Bush?s plan [to privatize Social Security] that was outlined during the campaign,” Republican Rep. Jim Ramstad of Minnesota told Minnesota Public Radio. Ramstad hasn?t been the only Republican to speak out against Bush?s Social Security plan.
“Why stir up a political hornet?s nest – when there is no urgency?” Republican Congressman Rob Simmons of Connecticut asked in the Washington Post recently.
Republican Senators and House Representatives running for re-election must watch what they vote for because it can cost them the election in 2006. Voting to privatize Social Security could be political suicide, since the polls show that public support is not there for privatization.
Bush?s plan and persistence to privatize Social Security is another issue that is only going to divide the county even further and create intense political debates. Private accounts would enlarge the gap between the wealthy and lower class, just like the tax cut policy increases the national debt by the trillions and gambles with people?s earnings and financial stability. Privatization is not a solid economic solution.
Brian Fanelli is a junior majoring in comparative literature with minors in creative writing and journalism.