social security – Yip Abides

Dubya and his band of thieves:

Let us be clear and plain. There is no problem with Social Security. Social Security will be there for us and for our children if we have the guts to stand up and fight a gang of thieves and ideologues who mean to take it from us.

A version of this article was originally published in New Ground 77, July — August, 2001

by Bob Roman

By the time you read this, Dubya’s marvelously bipartisan commission on Social Security will have recommended diverse and devious ways of “strengthening” a system in “crisis”. This is rhetoric from George Orwell’s 1984, where peace means war, where words in political discourse mean whatever is presently advantageous.

Of course, the conservative side of the debate has no monopoly on misdirection. Social Security was promoted in Congress and to the public as something analogous to a private pension plan. It was financed as a payroll deduction, split equally between the employee and employer, just like something from a collective bargaining agreement. The benefits were based in large part on the monies earned. Surplus revenues were placed in a “trust fund”. It all sounds so very fiduciary, something so very familiar to people accustomed to receiving their benefits as a condition of their employment. In fact, Social Security is and has been a “pay as you go” government program that provides disability and survivor benefits as well as old age pensions out of current revenues. The surplus gathered by the payroll taxes is not entirely irrelevant but it is primarily a matter of bookkeeping by the government. And, it might be added, not entirely honest bookkeeping.

If you need an example of why the expedient argument is not always the best argument in the long run, Social Security is it. The same arguments used to sell the system to a wary public, particularly a wary business class, turn out to be the same arguments to use in destroying it. Because as a financial trust, Social Security can be portrayed as vulnerable to changes in the economy and to demographics.

Draw the trend lines. At some point they’ll intersect; sound the alarm. You’ve got a great story: the monumental crash of a program that will send millions of soon to be elderly into poverty. It is a story that will guarantee a multitude of eyeballs and thus advertising revenue, one that is sufficiently complicated to deter any reporter or editor from explanatory reporting that would spoil the fun, one that nicely serves the needs of all levels of the media enterprises from reporter to editor to publisher to owner.

The moderately obvious problem with trend lines is… that they are trend lines, a static representation of a dynamic system, subject to change without notice. For a long while, the left attempted to use a variation, a subset of this argument. The left pointed out that projections calculated by the Social Security Advisory Board, and used as ammunition against the program, assumed a rate of economic growth that was historically conservative. Use a different but plausible number, and your lines intersect at a point so far in the future as to be no longer very interesting.

There are many problems with this argument, including the fact that higher levels of economic growth ultimately result in higher benefit levels and that given the vagaries of history the Board’s economic growth projections could have just as easily been optimistic. More to the point, it maintains the myth of Social Security as Trust Fund.

Happily, this debate happened during sustained period of economic expansion. The crisis point kept receding into the future. The news media were confronted with what should have been obvious: this story has no clothes.

What to do?

Because we live in a 1984 political world, where past political news dims into irrelevance within a span of months, it’s easy enough for the opponents of Social Security to at last admit the obvious. The draft report of Dubya’s Commission clearly describes Social Security as a pay as you go government program. But now, it is that very nature of Social Security as a government program that is identified as a problem.

The Commission’s report states:

“Many working adults do not believe that they will ever collect retirement benefits from Social Security. Such a failure has never once happened in a program that dates well back into the last century.” (Page 2)

” workers and retirees have no legal ownership over their Social Security benefits. Instead, what they have is a political promise that can be changed at any time, by any amount, for any reason. In any retirement system a lack of legal ownership is a source of insecurity.” (Page 3)

Later, the report continues:

“Today’s beneficiaries are not living off financial assets accumulated in the past. Today’s workers are not accumulating financial assets for the future. Workers ‘invest’ their payroll taxes not in financial assets but in the willingness of future politicians to tax future workers to pay future benefits.” (Page 10)

Is this a problem? Just who are these politicians who are unwilling to fulfill this promise to the working people of our country? In fact, they are the President’s cronies and allies. They are the people who, year after year, have been insisting that the system is in crisis, that something needs be done now. They are the usual suspects: that vast right wing conspiracy of money, foundations, mouth pieces and tame elected officials.

The AFL-CIO has identified some of the principal players in the campaign to destroy Social Security. The libertarian Cato Institute has made Social Security a major priority. They have an ideological agenda and this is a major motivation for the much of attack on the program, although for cynics and Marxists it is enough to point out that much of the Cato Institute’s funding comes from Wall Street firms and banks that would directly benefit from a privatized “social security”. Another player is The National Development Council/Economic Security 2000, which plays a role on the right similar to that of the Campaign for America’s Future on the left. The National Center for Policy Analysis is another major player. This organization was one of the top backers of California’s Proposition 226, and it has promoted privatized Social Security for the past 10 years. It also supports school vouchers, massive tax cuts for the wealthy, privatized prison labor, paycheck deception legislation and funds bills opposing patients’ rights. And finally it should be no surprise that the Investment Company Institute, the lobbying arm of the mutual fund industry, has made trashing Social Security a top legislative priority.

Let us be clear and plain. There is no problem with Social Security. Social Security will be there for us and for our children if we have the guts to stand up and fight a gang of thieves and ideologues who mean to take it from us.

The problem is not programmatic. It is political.

What of those intersecting trend lines? The average age of our population is increasing, and if we hope to limit the number of humans on our planet, let us hope this trend continues. As it continues, Social Security will become more expensive. If one insists on financing the program strictly out of payroll taxes, which are limited to the first 80,000 dollars of income, the payroll tax would increase from the present 12.4 percent to, at worst, 15.4 percent, split equally between employer and employee. This is according to the Social Security Advisory Board. To whom is this a problem?

And there are other possibilities regarding payroll taxes:

“Making all earnings covered by Social Security subject to the payroll tax beginning in 2002, but retaining the current law limit for benefit computations (in effect removing the link between earnings and benefits) would eliminate the deficit. If benefits were to be paid on the additional earnings, 88 percent of the deficit would be eliminated.” (Social Security: Why Action Should Be Taken Soon. Social Security Advisory Board, July, 2001. Page 27)

And finally, why should Social Security be restricted to the payroll tax? If providing for the elderly, the bereaved, the disabled is a priority then partially financing it out of general revenues should not seem unreasonable. But it does mean, perhaps, that we will need to decide which is more important: Social Security or Star Wars? Social Security or another carrier battle group? Social Security or a tax cut for the wealthy?

The last resort of the enemies of Social Security is an appeal to greed. Heaven knows, we are a people well trained to gluttony, so this argument should have some affect. Beyond tedious explanations of the difficulty in making comparisons between private investment and the benefits of the Social Security program, it should be enough to simply note that for the rich and the reasonably well off, we already have a privatized supplement to the Social Security program in the form of the various Individual Retirement Accounts and 401(k) plans. These subsidized forms of retirement savings only sometimes provide enough to actually support retirement; the less well off end up raiding or borrowing against them for immediate needs. But more to the point, as the New York Times recently reported, the average 401(k) plan actually lost money last year. And while it’s probably too complicated for a mass audience, it wouldn’t hurt to point out the uncertain record and uncertain health of our nation’s private pension plans.

Dubya’s tame Commission argues that there is no guarantee in the promises of politicians: of course not. It’s not entirely up to politicians to keep promises; it’s our responsibility as well. But neither is there a guarantee in the value of financial assets, as the stock markets have so well demonstrated recently.

The drive to privatize Social Security is not an isolated issue. It is part of an ideological attack on the working people of this country. It is nefarious plot by Dubya and his band of thieves to carve the U.S. government as if it were a Christmas turkey, and sell it, piece by piece at bargain prices to the wealthy.

Are you going to let them get away with this?

Preserving Social Security

This was originally published in New Ground 100, May — June, 2005.

by Bob Roman

The fight to preserve Social Security gathers momentum, helped in large part by the apparent terminal ineptness of the Bush Administration. After months of campaigning for private accounts as a substitute the present Social Security system, Bush finally broke down and proposed a plan: how about benefit cuts with private accounts on the side? This has not helped his position.

One shouldn’t give Bush all the credit. Americans United to Protect Social Security has been active in all 50 states building grassroots opposition to the attack on Social Security. This has paid off in the ability to react quickly to events. When hearings were scheduled on the issue, a National Day of Action was declared on April 26. In Chicago, Illinois United to Protect Social Security (IUPSS) brought about 100 people together outside the Social Security building on west Madison in Chicago. The event gathered considerable press and, typical of these events, spontaneous participation by passers-by. In Washington, DC, a national rally was held on the 28th. The rally brought over 3,000 people together to hear Illinois’ William McNary, AFSCME President Gerald McEntee, and Kim Gandy of NOW speak. The rally even had its own feeder march: a brigade of 120 members of Congress who marched together from their Capitol offices.

In Illinois, IUPSS has engaged in other coordinated national actions and has kept up an ongoing campaign of targeted grassroots organizing. The AFL-CIO declared a National Day of Action Against Social Security Privatization on March 31, aiming at brokerage houses participating in industry trade associations advocating privatization, particularly Charles Schwab. The Illinois AFL-CIO, the Chicago Federation of Labor, the Illinois Alliance for Retired Americans and IUPSS organized a noon hour picket outside the Charles Schwab offices on south Wacker Drive in Chicago. Hundreds of people participated, and a thoroughly stonewalled attempt at delivering a letter to the office resulted in a great bit of drama for the journalists.

On April 2nd, IUPSS took the fight to the Republican leader in the House, Dennis Hastert, with a demonstration outside his district office in Batavia. This brought together several hundred people from all over Illinois, including the local chapter of “Billionaires for Bush”.

Chicago DSA endorsed and promoted both these events.

All Along the Food Chain
Organizing continues apace with Congressional District committees being formed to target Republicans Dennis Hastert in the far western suburbs, Jerry Weller in the southern suburbs, and Tim Johnson in east central Illinois (Champaign – Urbana). IUPSS is planning to have at least one big event each month to keep the issue before the local press.

The Alliance for Retired Americans has produced a 12 minute video rebutting the conservative attack on Social Security. And it is planning to bring its petition gathering semi truck tour to the Midwest in early July (a flat bed semi with bales of collected petitions as a visual aide for rallies and media). The AFL-CIO is conducting a series of “buy-in” training sessions that both educates union activists and creates a network on the issue that can be activated.

Scoundrels Worth Watching
One shouldn’t think the other side is idle. The national strategy thus far has been to keep the hot potato in the Republican lap by discouraging any “Democratic” plans or proposals. The Congressional Democrats have been amazingly disciplined on this issue, but the proponents of dismantling Social Security have been generating some pressure of their own. Finally one Democrat, Robert Wexler of Florida, has nervously succumbed to the noise and proposed his own legislation, “The Social Security Forever Act of 2005”. As of press time, his proposal had not been translated into specific legislation, but as sketched in a speech the proposal amounts to simply removing the cap on income taxed for Social Security. That this is an entirely reasonable adjustment to the financing of Social Security is beside the point, which is that the proposal is premature.

At the same time, a few dozen bills have been introduced in Congress affecting Social Security in one way or another. Some are global attacks on the system. But quite a few are efforts at tinkering with it, both well meant or subversive, for example proposals to exclude particular classes of public employees from the system or to diversify the holdings of the Social Security “Trust Fund” to include bank certificates of deposit. These are all worth tracking as a long standing conservative tactic is to nibble institutions to death, especially if frontal attacks seem futile.

Illinois Unites to Preserve Social Security

This was originally published in New Ground 99, March — April, 2005.

by Bob Roman

The campaign to protect Social Security got off to an auspicious start in Illinois with a demonstration outside the Charles Schwab brokerage offices on South Wacker Drive. Schwab was targeted as they are one of the players in the effort to privatize Social Security. The AFL-CIO in particular has been putting public pressure on the financial services industry and has had some success in neutralizing specific firms. For example the investment firm of Waddell & Reed recently announced it left the pro-privatization Alliance for Worker Retirement Security (AWRS) after activists prepared to demonstrate outside its Kansas office. Charles Schwab belongs to the AWRS. More recently, the Financial Services Forum, made up of CEOs of big finance companies, dropped out of Compass, the group leading financial industry support for President Bush’s plan to privatize Social Security. Some 90 people participated in this Valentine’s Day noon-hour informational picket, including a delegation from UNITE HERE. It was particularly gratifying that a number of passers-by stopped to join the line.

Immediately after the picket, an organizing meeting was held at the AFSCME Council 31 office. In the month that has followed, Illinois United to Preserve Social Security (IUPSS) has grown to about a hundred organizations from around the state. IUPSS is defending Social Security on several “fronts”.

One is, of course, Congress. A number of Representatives have held town hall meetings, and IUPSS supporters have pressured others to do so. (You are invited to call your Representative to ask about them holding a meeting on the issue.) Two in particular have been helpful to the cause. Representative Lane Evans held several meetings around his district, using them as an educational tool, teaching why Social Security is not in “crisis”. Representative Jan Schakowsky also organized a similar meeting on the Loyola University Water Tower Campus at the end of February. This featured a very good PowerPoint presentation and appearances by Senators Durbin and Obama. An overflow crowd of several hundred attended. Representatives Lipinski and Rush have also held meetings. IUPSS is encouraging people to call their Representatives in support of maintaining Social Security, and a few downstate Republicans have been getting a steady flow of three or four dozen calls a day.

Thursday, March 31 will be a “National Day of Action for Retirement Security”. Here in Chicago, the Chicago Federation of Labor and the Illinois Alliance for Retired Americans are planning a noon hour demonstration outside the offices of Charles Schwab at 150 S. Wacker Drive in Chicago, again, because the brokerage has refused to budge. Invited speakers (not yet confirmed) include U.S. Senators Dick Durbin and Barack Obama and U.S. Congresswoman Jan Schakowsky and U.S. Congressman Rahm Emanuel.

An April 2nd demonstration outside the Batavia offices of Representative Hastert is also in the works, and IUPSS hopes to bring several hundred, qualifying it as a major uprising by west suburban standards. Busses will be coming from several locations, including Chicago.

A resolution, HR128, has been introduced in the Illinois legislature, opposing Social Security privatization. It can be modified for other governmental bodies, and introducing it to the Chicago City Council is a possibility.

The media is another “battle ground”. Some of this effort has taken the form of multiple rounds of press conferences in the various “media markets” around the state. Illinois Alliance for Retired Americans President Hal Gullett has been a common denominator among them. While turnout has not been great at all of them, each has resulted in at least some press.

But the major field of struggle is simply public opinion. Because of our republican structure of government, public opinion is often a secondary or even tertiary consideration in politics. But in this instance, players on both sides of the question are judging the viability of Bush’s attack by changes in polling figures. So far, we’re winning.

The fight is far from decided. The Right is in the process of raising $200 million to support their attack. Those defending Social Security have already hired a political consulting firm to manage the campaign. The intent is to have each Congressional District have an organizer, and a small staff (including PR person) for each state.

This is a fight we can win. And should we win, could it be the beginning of the end of conservative rule in America? One might hope so.