News Release

Social Security Politics

Today, George W. Bush is expected to outline a Social Security plan that moves toward privatizing the program. The following policy analysts are available for interviews:

DIANA ZUCKERMAN
Executive director of the National Center for Policy Research for Women and Families, Zuckerman said today: “Allowing workers to divert some Social Security payroll taxes for personal investment, as George W. Bush proposes, would be a bad idea for most people, especially women. Private Social Security accounts, like checking accounts or any other accounts, would have fees. Low earners, many of whom are women, would put very little money in these individual accounts. Even if their investments do well, it is still unlikely that the returns on their investments would make up for those administrative fees. And, of course, private accounts don’t last a lifetime — when the money runs out, there is nothing left. That is a particular risk for women, who tend to live longer. Women also depend on Social Security more than men because they are much less likely to have private pensions.”
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RICHARD Du BOFF
Professor of economics emeritus at Bryn Mawr College, Du Boff said today: “Privatizing Social Security is a potential bonanza for Wall Street. Also, many are ideologically and politically committed to destroying Social Security since it is a government program that works well and succeeds where private enterprise has long failed. Advocates of privatization often ignore the transition costs too. Remember that Social Security is a pay-as-you-go system. Current retirees are supported by current workers. So if you privatize the plan, and current workers put their money into the stock market, who’s going to pay benefits for current retirees?”
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DEAN BAKER
Co-author of Social Security: The Phony Crisis and co-director of the Center for Economic and Policy Research, Baker said today: “George W. Bush is trying to pull a cheap trick on the public. His privatization plan is based on the assumption that the stock market will give the same returns in the future as it has in the past. Yet, the only reason why Social Security is projected to run into any problem at all is that the trustees project that the economy (and corporate profits) will grow only half as fast in the future as in the past. No one has been able to produce projections for the components of stock returns (dividends and capital gains) which show how this can be possible. Governor Bush’s chief economic adviser on this issue, Martin Feldstein, was explicitly challenged to produce these projections a year ago. He still has not been able to do so. The fact is, Governor Bush is trying to sell the public a plan based on phony numbers.” Baker added: “It’s unfortunate that Social Security has even come into play in this election, because the program is fundamentally sound. If the Clinton-Gore administration had not scared people about the state of the program with their pledges to ‘save Social Security first,’ it is questionable that Bush would be proposing a privatization plan today.”
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For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167