White House Astroturf For Social Security Phase Out

When White House Budget Director Joshua B. Bolten introduced a "single mom" from Iowa to promote President Bush's plan to dismantle Social Security, she was presented as one of the "regular folks" in favor of private savings accounts. But Sandra Jaques, who addressed a White House economics conference on Thursday, "is not any random single mother," the New York Times' Edmund Andrews wrote. "She is the Iowa state director of a conservative advocacy group, FreedomWorks, whose founders are Jack F. Kemp, the former vice-presidential nominee, and Dick Armey, the former House Republican leader." FreedomWorks was formed by a merger in July 2004 of Citizens for a Sound Economy and Empower America. The American Prospect's Matthew Yglesias points out how a "little incidental dishonesty slip by" in Andrews' "otherwise excellent" article. Recently, the Times' Paul Krugman thought explaining the manufactured Social Security crisis was so important that he took "a break from my break" to debunk the hype: "Social Security is a government program that works, a demonstration that a modest amount of taxing and spending can make people's lives better and more secure. And that's why the right wants to destroy it."


When I was 25 and thought SS was an investment, I wished I could have more say in the handling of the money so I could generate a better return. Now that I'm 60 and realize the true character of SS, I don't like the idea of 25 year olds having to support me with their payroll taxes. The ratio of retirees is much to their disadvantage and sure to generate ill will. In either case I would prefer more privatization, although it's too late to do me much good. larry

I'd like to direct my reply to Larry - who sounds real confused and real republican. Social security is and has been a very successful and safe program for many years and benefited many Americans. Rich & poor. You commented that you wished you had been able to handle "your" money and how unfair it is for younger workers to have to pay for others. I don't know many 25 yr olds who are real good at saving and planning however I'm willing to grant that when you were that age you were wise beyond your years and capable of saving.You would have invested your money in the stock market or perhaps bonds or real estate and been very displined about it because you're a real smart guy. You're not only smart - you're lucky - you don't have your money in Savings & Loans, Enron - etc. No real estate bubbles for you. The bond market feeds you a steady stream of dividends. After 35 years you're ready to retire, rich. What a wonderful life - but how about the rest of the population? Those that aren't so savvy? Or educated? Or disciplined? Or just lucky? The point of "social security" was to prevent the utter poverty and terror of starvation and deprivation that had occured in the 1920's and 30's. It is apparent that, you, Larry have never been poor or needy. As for younger workers feeling resentment about the compact made with their parents and grandparents generation - they have more opportunities now to invest in IRA's etc. and the monies that presently accumulate in Social Security will be a safety net for them in the future. There are no guarantees on Wall Street and the consequences of fraud and fees are all too prevalent. Social Security does not need reform - at least not the way this administration wants to do it - but an adjustment of the actuary formulas used for benefits. I hope that young and old Americans will recognize that reform in this instance means the undermining of their collective futures and that they will insist and fight this outright theft of "their" money. I hope you , Larry have done well and at 60 yrs old don't need social security - just remember you don't have to take it. Sincerely, barnmonkey2/12/21/04

I would like to present this worst case senerio of the risks associated with the Social Security Reform plan. One problem I see is the looting of our Treasury. What if a very large number of Social Secruity investors had put their moneys into the likes of Enron, World Com, etc. I see the US Treasury forced to bail out these companies to save the Social Security investors. Effectively looting the treasury. Is this a likely senerio? Somebody stop "King George" before he creates more problems for us all.

It is becoming clear that the neo-cons have made priority one, the destruction of the most successful government program ever devised. Given that, I fully expect the issue to become clouded with the same manner and volume of LIES and distortions that preceeded the Iraq war. They are trying to define the projected date at which benefit payments exceeds collections (2018) as the point at which the "progam will be bankrupt". This is false. With no changes, the program is solvent until about 2050, and can easily be made solvent forever with minor changes. Nevertheless, George and his boys will do their best to convince people that Social Security will not be there for them and is not a viable progam. The fact that so many Americans actually beleive that Saddam planned the 9/11 attacks and had WMD, is testimony to the power of LIES in the right wing echo chamber. They will use them when it suits their agenda, and this is most certainly such a case. TRUTH TO POWER! TD

I was wondering if someone could create a fictional private Social Security investment account dating back 20 years from today and determine if an average person would have prospered or would have lost everyting. The account would go a long way in proving or disproving if the presidents plan to privatize social security would work. I think the account would need to be invested in index funds and all fees applied as applicable. I don't have the knowledge or resources to accomplish this, so I thought some of your readers might. What do you think?

The initial Social Security Act permitted municipal governments to opt out of the system - a loophole that Congress closed in 1983. In 1981, employees of Galveston County, Texas, chose by a vote of 78 percent to 22 percent to leave Social Security for a private alternative. Brazoria and Matagorda counties soon followed, swelling the private plan to more than 5,000 participants today. In the private plan, contributions are similar to those for Social Security but returns are quite different. Initially, employees and their employer were each required to contribute 6.13 percent of income; recently, the counties increased their contribution to 7.65 percent - for a total contribution of 13.78 percent. Of that 13.78 percent, 9.737 percent goes to the employee's individual retirement account, which pays a 6.5 percent average interest rate, compounded daily. The remainder pays for disability and life insurance premiums to cover the employee in case of an accident or death. Workers continue to pay their Medicare payroll taxes and to receive Medicare benefits upon retirement. But while the cost of the private program, known as the Alternate Plan, is virtually the same to the employee and employer as Social Security, the benefits are far greater. According to First Financial Benefits, Inc., which created and administers the plans: A person retiring today at age 65 with 40 years of deposits and an annual salary of $20,000 would retire with $383,032 in a personal account. Someone with a $30,000 salary for 40 years would retire with $573,782. And a person with a $50,000 salary for 40 years would retire with $956,303. A personal retirement account this size provides a much larger postretirement income than does Social Security. Moreover, retirees under the Alternate Plan have a number of options not available to retirees under Social Security. For example, those with the Alternate Plan can choose among several annuities or take their money in a lump sum. As the figure shows, under one option: A retired $20,000-per-year worker with the personal retirement account would receive $2,740 each month at current interest rates, while Social Security benefits would be about $775 per month. A $50,000 per year worker would receive $6,843 from the private plan, compared to $1,302 from Social Security. In addition, the employer's contribution pays for much more generous benefits than those provided by Social Security. The life insurance benefit is three times the worker's salary (with a minimum benefit of $50,000 and a maximum of $150,000); Social Security, by contrast, pays a one-time death benefit of $255 to a surviving spouse. Disability insurance under the Alternate Plan pays 60 percent of an individual's salary until age 65 or until the individual returns to work and is relatively easy to qualify for, while Social Security disability benefits can be very difficult to qualify for and are unavailable to young workers who have not yet worked the required amount of time. TRUTH TO THE IGNORANT!!! RB