New phase of Bush’s sinister scheme
By
Milt Neidenberg
Published Apr 20, 2005 3:56 PM
Will mid-April’s three-day stock market
crash, when the Dow Jones Industrial Average fell over 400 points, dampen the
Bush administration’s enthusiasm to invest workers’ retiree accounts
in the Wall Street stock market?
Workers get their first Social Security cards at the end of the Depression.
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NASDAQ also took a dive, partially
connected to losses in blue-chip IBM stocks. Standard & Poor’s 500
took big-time hits, sending markets around the world reeling with heavy losses.
Will this stop the anti-worker president’s hard sell to privatize Social
Security?
Not likely.
The snake-oil salesman in the White House
hears only the demands of the one percenters—the wealthiest sector of
society. There is no turning back for this master of deception and his
co-conspirators, who are determined to coerce the workers into giving up their
Social Security accounts to the financial institutions.
In a sinister
preemptive strike, he has marshaled government agencies, their bureaucracies and
Wall Street lobbyists in a country-wide 60-day promotional blitz. The aim is to
bamboozle millions of hard-working Social Security participants, primarily the
baby boomers, into believing that Social Security is in crisis and that only
private accounts will provide them with a secure retirement.
The Bush
administration has siphoned off government funds from the Small Business
Administration, Social Security itself, the Treasury Department and other
bureaucracies, illegally commandeering the vast resources of the federal
government in order to promote the privatizing of Social
Security.
Taking security out of the trust
fund
Recently, Bush traveled to the Bureau of the Public Debt in
Parkersburg, W.Va., a secretive institution unknown to the average
worker/retiree. He went there to prove to the millions of baby boomers his
contention that the Social Security trust fund is in crisis and may go broke.
Referring to a file cabinet in Parkers burg filled with securities
purchased for the Social Security system, Bush remarked, “There is no
trust fund—just IOUs that I saw firsthand.” (Wall Street Journal,
April 13) He blamed the government and questioned whether the government should
control it.
But Bush is no innocent bystander! He is the CEO of this
government. And he has commanded it to serve a capitalist empire that has
plundered and profited from imperialist wars as well as the war against U.S.
workers.
Alarmed and angry, Charles Rangel, a Black Congress member from
New York and the top Democrat on the House Ways and Means Committee, wrote to
Treasury Secretary John Snow, point man for Bush’s privatization plan:
“I urge you to clarify whether these bonds are real, and whether the U.S.
intends to honor them.”
The truth is, there are no bonds or other
marketable securities in the trust fund. They have been totally replaced with
IOUs from the government that are not marketable. In 1985 the trust fund was put
at the disposal of the Reagan administration to use on an emergency basis for
non-pension liabilities. But since then, both Democratic and Republican
administrations have extended this provision, allowing them to use its assets to
cover other debts.
Thus, hundreds of billions of workers’ retirement
money has been spirited away without transparency, or oversight, or any
independent working-class trustee to monitor these illegal transactions. Will
future governments honor these IOUs?
Bush is doing everything he can to
undermine confidence in Social Security—not to fix it, but to destroy it.
Former Treasury Secretary Paul O’Neill spoke the truth before he
was forced out of the Bush administration. He warned the public in 2001 that
“unlike private pension funds, the trust fund holds zero marketable
assets, even though workers paid in cash surpluses. It contains only
non-marketable bookkeeping IOUs for which no budget commits their pay-back and
no cash interest is paid.” (Associated Press, July 10, 2001)
There
are no appropriations in past, present, or future fiscal budgets to replace the
surpluses created by the Federal Insurance Contributions Act (FICA). The IOUs
have yet to be backed by U.S. dollars, bonds or Treasury notes that could gather
interest and add many billions of dollars to the trust fund. Bush’s
outrageous plan is to continue these illegal transactions and be sure the trust
fund has no marketable funds.
The total government debt at the end of
fiscal 2004 was $7.4 trillion, according to the Federal Debt Report. The total
amount siphoned off from the Social Security trust fund to date is $1.5
trillion; an additional $1.6 trillion has been ripped off from a variety of
other trust funds: the Federal Employees Retirement System, Federal Hospital
Insurance Trust Fund, Railroad Retirement Fund, Military Retirement Fund and
others. This doesn’t include what it would cost the government to set up
private Social Security accounts: over $2 trillion.
Here is the
fundamental question: Will Bush ultimately succeed in depleting the Social
Security trust fund, with no plan to restore the surpluses needed to support
future retirees? Shifting Social Security funds into private accounts is the
first step in this sinister process.
The half truths from the Bush
neo-con inner circle smell of a neo-fascist technique—a broadside attack
against the workers and the oppressed and poor while posing as their savior. The
Bush-created crisis is blamed on those who oppose him privatizing Social
Security.
Inflation and stagnation
The practice of ripping
off trust fund surpluses to cover deficit spending hides the true costs of debt
incurred by the capitalist government. With inflation and stagnation surfacing,
the Bush administration will deplete these funds at a more rapid
rate.
Funds have been sip honed off in the hundreds of billions to expand
the Penta gon and to pay for the occupations of Iraq and Afghan i stan. The
money is also used to service the huge budget deficit—in other words, to
pay the interest on huge loans from banks and other financial
institutions.
Nevertheless, Social Security continues to generate a huge
surplus each year—workers are paying much more into it than retirees take
out. In that sense it is alive and well and has a surplus of cash for at least
the next four decades. That surplus would last much longer if the government
were to protect the current trust fund accounts. But they have not and will not.
In fiscal 2004, over $139 billion that went into the trust fund has since been
removed to pay for non-pension liabilities.
Bush and his conservative
ideologues are well aware of these facts. So are Wall Street accountants and
actuaries, as well as informed academics and politicians of both capitalist
parties, all entwined in a conspiracy of silence. The Bush strategy is to sow
confusion and fear in order to win over the baby boomers to the campaign to
create private Wall Street accounts.
Social Security is one leg of a
three-legged stool that seniors and baby boomers hope will provide them with a
modicum of security. The other legs of the stool have virtually disappeared:
savings accounts, which have largely dissipated due to credit card and other
consumer debt, and private and corporate pensions. From the cradle to the grave,
poverty looms larger than ever.
The income gap between the wealthiest one
percenters and the workers and oppressed grows rapidly.
The capitalist
government is raiding Social Security—not saving it. It is of deep concern
to the workers and the oppressed that Social Security could become nothing but a
memory—a social safety net won toward the end of the 1930s Depression
through labor’s heroic battles with its class enemies.
While Bush
is barnstorming the country with lies about a Social Security crisis that he is
causing, the Democrats have now agreed that there will be a crisis down the
road. They have shown a willingness to discuss the problem if Bush would give up
his proposals to privatize Social Security. A compromise that would increase the
current tax, postpone the age of retirement, and maybe even reduce payments is
on the table.
Hands off Social Security!
There must be no
compromise on these potential concessions. Millions of workers and oppressed,
their families and loved ones, the disabled and others are totally dependent on
Social Security. With inflation and a stagnating economy, a militant campaign is
necessary to stop the government from raiding the trust fund.
Social
Security must be the line in the sand that will marshal an independent
class-wide struggle in the spirit of 1938, when Social Security was won. It is
an issue that can win the hearts and minds of young and old, whites and people
of color, the organized and the unorganized. The fight to retain and expand
Social Security will be historic—no less than the struggle over a century
ago to gain the eight-hour day, which is commemorated the world over on May Day.
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