Letter to Congress from the National Committee to Preserve Social Security and Medicare
Dear Representative/Senator:
As a former member of Congress, I understand thechallenges you face as you and your staff work through the FY07 budgetproposals. So I want to highlight an important, yet easy to overlook,item in the budget � Social Security private accounts. In the Hall ofthe House, the President called for a bipartisan solution to thechallenges facing Social Security. In his budget, however, he onceagain includes the same plan to privatize our nation’s most successfulprogram.
The budget analysis makes it clear that the President’sprivatization plan would increase the deficit dramatically, makesignificant cuts in Social Security benefits, and cause the SocialSecurity Trust Fund to face a cash-flow crisis earlier than itotherwise would. The President would finance private accounts by takingmoney out of the Social Security Trust Fund beginning in 2010.According to the Administration’s budget, the President’s privatizationplan would increase the deficit by $712 billion over 10 years. Thecosts of privatization would balloon thereafter and continue forseveral decades placing a huge new debt burden on current and futureworkers.
A recent analysis by the Social Security actuariesconcludes that the President’s plan would actually deepen the cash-flowproblems of the Social Security Trust Fund. The plan would deplete theSocial Security Trust Fund so quickly that the trust fund would face acash-flow crisis in 2012, five years earlier than projected undercurrent law.
Under the President’s privatization plan, SocialSecurity benefits for future workers would be reduced dramatically.First, the plan would reduce benefits for Social Security privateaccount holders by cutting benefits based on assumed rates of return intheir accounts. Second, the President would use �progressive� priceindexing to cut Social Security benefits even further, leaving the vastmajority of tomorrow’s retirees with only a minimal Social Securitybenefit. In the long run, the plan would effectively dismantle SocialSecurity.
During the past year, private accounts have been fullydebated by the American people and overwhelmingly rejected. ThePresident’s own White House Conference on Aging repudiatedprivatization, which, by itself, does nothing to strengthen thelong-term viability of the Social Security system. The President isdisingenuous when he uses his State of the Union address to call onCongress to work together on a bipartisan solution to our long-termretirement and health needs while offering a budget with exactly thesame polarizing and politicized Social Security provisions that havealready been rejected.
Cordially,
Barbara B. Kennelly
President and CEO