Bush, Greenspan threaten Social Security
By Milt Neidenberg
Amid cheers of "four more years," confetti and balloons
saturating the ballroom, President George W. Bush fired a
preemptive strike on Social Security at the Republican National
Convention Sept. 2.
He repeated his call to privatize a section of the system
which could empty the Social Security Trust Fund of $2 trillion
over 10 years. Currently the Fund provides about $492 billion
to 47 million retirees each year.
Bush opened his attack on Social Security in a cloak of lies
and deception. To a crowd of adoring delegates, he said: "We
will always keep the promise of Social Security for our older
workers ... in all these proposals, we seek to provide ... more
freedom and more control over your own lives."
According to former U.S. Rep. Barbara Kennelly, president of
the National Committee to Preserve Social Security and
Medicare, "The president is trying to hide the fact that in the
'ownership society,' what individuals really own is the risk.
No guarantees, no security, no protection."
It is an insidious plan. More than 150 million wage earners
currently pay into the Federal Insurance Contribution Act
(FICA), a tax of 6.2 percent of their wages to assure a modest
nest egg in retirement years. The workers have viewed this as
an insurance policy, a contract with the government, no
different from a defined benefit pension or a 401(k) pension
plan, though the courts have ruled that it is a social program
handed down by the government.
The Social Security Trust Fund has been ripped off as the
budget deficit grows at an alarming rate. Over the years,
trillions of dollars have been replaced by IOUs. These paper
coupons are worthless to the 77 million baby boomers, born
after World War II, who will soon reach retirement age.
Most recently, the borrowing grew astro nomically to pay for
the endless wars of imperialist aggression, tax cuts for the
wealthiest sector of capitalist society, plus huge amounts to
pay the banks for debt service.
The liberal establishment claims that Social Security could
be solvent if Bush would pare back around 50 percent of his tax
relief for the wealthy that he wants to make permanent, making
his privatization plan unnecessary.
Over the years, without consulting workers, many amendments
to the law have been passed, whether under Repub lican or
Democratic administrations. It was the Clinton administration
that created a commission that came up with the recommendation
to privatize Social Security through personal accounts to be
set up for young workers just entering the program, similar to
what Bush is now proposing.
There were divisions in the inner circle of the Bush
administration over whether to touch this hot potato. Those who
supported the idea of private Social Security accounts, like
Karl Rove, Bush's top hatchet man, and Treasury Secretary John
Snow, thought this would sit well with the future retirees.
Others like Chairperson of the Council of Economic Affairs
Greg Mankiw and top economic advisor Stephen Friedman saw it as
the "third rail of politics," a shock move that could even lose
Bush the election, except for the fact that John Kerry, his
Democratic opponent, has been mum on this crisis.
Federal Reserve Board (FRB) Chair pers on Alan Greenspan,
who claims to stand above the mundane politics of the two
capitalist parties, has all along supported downsizing Social
Security benefits.
Growing old a danger under capitalism?
At a two-day symposium held at the end of August, central
bankers, Wall Street academics and scholars gathered in Jackson
Hole, Wyo., for a conference organized by the FRB of Kansas.
The theme of the annual conference was demographics and
government retirement benefits. The discussion centered on how
to zap an aging population that is becoming a burden to
capitalist society--a sure sign of a decadent system.
Against a background of snow-tipped mountains, shiny lakes,
and plush hotels, FRB Chairperson Alan Greenspan set the tone.
He described the economic implications of the aging of the
population and predicted that it will significantly affect the
fiscal situation. He warned that the U.S. may have already
promised retirees more Social Security and Medicare benefits
than it can deliver and urged policy makers to "recalibrate"
benefits without raising taxes.
"If we delay, the adjustments could be abrupt and painful,"
he said. (Wall Street Journal, Aug. 30)
Greenspan talked about the "elderly dependency ratio," the
ratio of older workers to younger, and the fact that except for
a short period following the Second World War, "it has been
rising in the industrialized world." He said that the ratio is
worse for Europe and Japan.
The FRB chairperson reminded the elite audience that the
U.S. population older than 65 will climb from 12 percent to 20
percent by 2035. He warned political leaders that they cannot
count on continued rapid rises in productivity and faster
economic growth to solve the problems of soaring retirement and
health-care costs.
His speech was calculated to pressure young and old to
accept Social Security concessions or face the possibility of
never getting benefits. The truth is, many may never see a
Social Security check, but for different reasons.
According to the Sept. 5 New York Times, inhuman stress on
the job and the fear of being fired raises the question of
whether these wage earners will live long enough to collect.
"American workers are stressed out and in an unforgiving
economy, they are becoming more so every day."
Greenspan used his dominant position as the manipulator of
monetary policy (interest rates) to cover up his attack on
workers and oppressed communities. This is nothing new for
Greenspan. In the early 1980s, he wielded the hatchet when
President Ronald Reagan appointed him to chair a Social
Security Commission. His recommendations led to an increase in
the retirement age to as much as 67 for those who entered the
workforce after 1960 to get their entire benefit.
Greenspan presented the idea to tax Social Security
benefits, which Reagan and Congress readily seized. Once again,
the sly old conspirator was plotting strategy to satisfy his
ruling class masters.
Social Security won in struggle
The Social Security Act of 1935 was to be a first step to
guarantee an income for seniors, the disabled and the families
of those whose loved ones died prematurely. Social Security and
Medicare were meant to provide a precious network of
concessions won by the courage and sacrifice of the laboring
masses that took over the factories and the streets during the
1930s depression.
It was meant to be a beginning. Social Security was
considered one leg in a three-legged stool. The other two
necessary for a secure retirement were personal savings and
pensions.
But private sector pension plans are vanishing. Corporate
America, Wall Street financiers, and a government that
represents their class interests are savaging savings. Now
Medicare premiums are due to rise to a record 17 percent in the
coming year.
As the economy continues to shrink, the war at home
intensifies. Decent jobs are hard to find, and the endless wars
abroad in Iraq, Afghanistan and elsewhere have diverted
hundreds of billions of dollars from the needs of the people.
The relentless attack against the workers and oppressed
communities is tearing apart all the hopes of security in the
golden years.
Only bold measures, independent and class-wide, can stop
this hemorrhaging. Labor's forebears paved the way. Social
Security is a contract, an insurance policy, not a handout from
the government. It must not be reduced or denied.
Those benefits must be protected and advanced to guarantee a
retirement that is secure, 100-percent solvent and under the
control of trustees elected by beneficiaries.
There are more than 150 million wage earners in the Social
Security program. Young and old, multinational, women and
immigrants, they have produced the wealth of this capitalist
economy through their labor power. They constitute a powerful
force when united in a righteous cause.
Reprinted from the Sept. 16, 2004, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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