For Immediate Release
Thursday, July 19, 2001
Bush Commission Issues Sham Social Security Report
Pro-Privatization Panel Claims Fake "Crisis" to Scare Public and Enrich Wall Street, AFSCME Charges
Washington, DC —President Bush's Social Security commission — stacked with privatization advocates — today issued an interim report falsely claiming that the system is in "crisis." According to the American Federation of State, County and Municipal Employees, AFL-CIO, the commission's assertion that the "system is broken" is highly misleading and part of a cynical political strategy to undermine public confidence in the system and pave the way for benefit cuts.
The commission's report states that the Social Security system will be in the red by the year 2016 and has no real assets. But its conclusions are completely at odds with the latest report of the Social Security system's official trustees, including Treasury Secretary Paul O'Neill, which projects that the system can pay out full benefits until 2038. After 2038, roughly 75% of current benefits will be paid, and even this shortfall can be corrected with reasonable adjustments.
Like the President, the commission members all favor partial privatization of Social Security, where workers would divert a portion of their payroll taxes to private investment accounts subject to the ups and downs of the stock market. But the commission fails to mention that Wall Street investment firms, who are strongly supporting their plan, stand to gain billions of dollars in transaction fees under this scheme.
"This demonstrates what we've been saying all along: the President wants to enrich Wall Street at the expense of America's working families," said AFSCME President Gerald W. McEntee.
According to economists, the price tag of moving to private investment accounts is over a trillion dollars — the cost of covering benefits for current beneficiaries while creating new accounts for today's workers. This would force benefit cuts of up to 50%, a higher retirement age, and/or massive tax increases.
"It's outrageous to risk the futures of millions of Americans, who depend on Social Security not just for their basic retirement income, but for disability and survivor insurance as well. Social Security has never missed a monthly payment in its 66-year history and is easily the most successful Federal program ever created," Mr. McEntee said.
"President Bush's massive tax cut for the wealthy will force the country to dip into the Social Security trust fund set aside to provide basic benefits to future generations," Mr. McEntee added.
AFSCME, which represents over 200,000 current retirees and 1.3 million active members, joins other organizations in denouncing the commission's attack on the income security of millions of Americans at a press conference at the Capital Hilton, Tuesday, July 24, from 12-1 p.m.
