Yonit Shames
Published: April 13, 2005
When President Bush spoke at PJC last week, he addressed his Social Security reform plan. But, like his previous visit before the 2004 election, this was a publicity visit. Had it been more than that, he would have addressed the arguments his opposition has brought to the table and the devastating impact that his privatization plan may have on our generation.
Privatization will “save” Social Security, Bush says. However, even the most pessimistic forecasts from the non-partisan Congressional Budget Office say that Social Security will not encounter problems for at least another 40 years, and after that, even with no changes, people will still receive 70 percent of the benefits people do today. Restructuring will be necessary, but is Bush’s costly plan the best solution?
First and foremost, Bush’s plan will have astronomical costs. Besides the trillions of dollars that the government will be required to borrow in order to restructure the system, privatization would subject Social Security to the instability of the stock market (whereas now it is protected from inflation). Most importantly, the CBO says that Social Security benefits will be significantly cut for everyone, even for those who do not elect to have private accounts.
Proponents of the plan say that workers will be able to make up for this rift by earning money through their private accounts. Unfortunately, the reality is that those who need Social Security benefits the most, such as minority groups and women, who generally have lower salaries than non-minority groups, may not be able to do so.
Many citizens’ rights groups have expressed vehement opposition to Bush’s proposal. The National Partnership for Women and Families says that reducing the guaranteed benefits will be particularly harmful those coming from poor families and minority groups because people who earn less will have less money invested in their accounts. The National Women’s Law Center points out that stock market shifts could not only cut personal benefits for the elderly, but that they would cut benefits for children whose parents die prematurely and for widows.
Minority groups, too, have expressed open disapproval over the plan. The League of United Latin American Citizens says that every dollar put into private accounts will translate into a dollar added to the national deficit, which our generation will have to repay. The National Association for the Advancement of Colored People says that it may disproportionately harm already disadvantaged minority groups by forcing them to “play the lottery” with their financial futures.
If he were not so busy seeking publicity, perhaps the president would be spending more time considering the catastrophic effects his plan could have on the groups that need Social Security the most- of which his white-collar Wall Street buddies most certainly are not part.