A Stacked Deck
President Bush's commission seems destined to rubber-stamp his plan to privatize Social Security.
By Clyde Weiss
WASHINGTON, D.C.
When President Bush set up the "principles" to guide his Commission to Strengthen Social Security, he left no wiggle room for independent judgment. The executive order that established the panel said its recommendations "must include individually controlled voluntary personal retirement accounts."
Even so, declared White House spokesperson Claire Buchan, "We are not going to prejudge what the commission will find." No need: Bush already knows what the commission will conclude. He has stacked the 16-member panel with people inclined to support privatized Social Security.
WHO ARE THEY? Commission Co-chairman Daniel Patrick Moynihan, a Democrat who recently retired from the U.S. Senate, is an unabashed supporter of privatizing Social Security. In 1998, he introduced legislation to allow workers to shift 2 percent of payroll taxes that now support the Social Security Trust Fund into personal savings accounts. To make it work without destroying the entire system, the plan would have cut benefits, raised taxes and increased the age at which full retirement benefits could be collected.
Co-chair Richard Parsons, a Rep-ublican, is co-chief operating officer of AOL Time Warner. The organization "Campaign for America's Future" says Parsons has a "track record as a corporate executive willing to undermine the retirement security of his employees." The reason: He managed a system at Time Warner that falsely classified some employees as temporary workers or independent contractors, denying them pensions, health insurance and employee stock-ownership benefits. The U.S. Department of Labor sued on the employees' behalf. Last year, the company paid $5.5 million in back compensation to settle the suit.
Other members have direct ties to the banking and financial investment industries, which stand to profit greatly from any plan that diverts Social Security taxes to create individual investment accounts. Among those members is Robert Pozen, vice chairman at Fidelity Investments, the nation's largest mutual fund company.
SWIFT REACTION. "This demonstrates what we've been saying all along," says AFSCME Pres. Gerald W. McEntee. "The President wants to enrich Wall Street at the expense of America's working families."
In a joint statement after Bush announced the panel, Senate Democratic Leader Tom Daschle (S.D.) and House Democratic Leader Richard Gephardt (Mo.) expressed dismay that Bush's creation constitutes a rubber stamp for his ideas. "Instead of working with us," they wrote, "he has decided to appoint a commission to validate his plan to divert Social Security funds into the stock market. The President's appointees do not represent the range of views among Democrats or among Social Security experts generally."
Even Bush's supporters seemed surprised (and happy) that the Bush administration's Commission to Strengthen Social Security makeup was so one-sided. "This is a remarkably pro-privatization group," gushed Michael Tanner, director of the conservative Cato Institute's Social Security Privatization Project. He had a special reason to be pleased: Sam Beard, a board member of the project, also serves on the commission.
Non-partisan observers were understandably less enthusiastic. Horace Deets, former executive director of AARP, said the commission "appears to lack a balance of viewpoints, which suggests its recommendations will not develop in a way that will lead to the broad support needed for action."
It didn't take long for Deets' prediction to come true. With the release last July of a draft report that called the Social Security system "broken," the commission set itself on a highly pre-determined course. U.S. Rep. Robert Matsui (Calif.), ranking Democrat on the House Ways and Means Social Security subcommittee, called the commission's first report a political document intended "to incite the public into thinking the system is in such bad shape that [its members] need to move to a radical solution."
The panel "tries to create a sense of crisis when there isn't a crisis," commented Alan Blinder, a former Federal Reserve vice chairman and economic adviser to then-Vice Pres. Al Gore during the Presidential campaign.
Ed Coyle, executive director of the Alliance for Retired Americans, a new, 2.5-million-member advocacy group backed by AFSCME and the AFL-CIO, took one look at Bush's commission and came to this conclusion:
"The members ... do not represent Social Security beneficiaries or everyday working people who contribute to Social Security and count on its protection against loss of earnings because of retirement, disability or death. Bush and his commission members try to deceive younger workers by claiming they can do better by investing in the stock market. In fact, taking Social Security taxes out of the Trust Fund will require cutting future benefits of younger workers by more than 50 percent."
The commission's report is expected next spring.
