[Congressional Record Volume 147, Number 102 (Friday, July 20, 2001)]
[Extensions of Remarks]
[Page E1390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        AARP CRITICIZES BUSH SOCIAL SECURITY PRIVATIZATION PLAN

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                       HON. JANICE D. SCHAKOWSKY

                              of illinois

                    in the house of representatives

                         Friday, July 20, 2001

  Ms. SCHAKOWSKY. Mr. Speaker, Next week, the President's handpicked 
Social Security Commission will issue an interim report, a version of 
which is already circulating among Commission members, the media and 
Social Security experts.
  It is disappointing, but far from unexpected, that the interim report 
is attempting to ``spin'' the American public by claiming that there is 
a ``crisis'' in Social Security. The Commission and the Bush 
Administration are laying the groundwork for next fall's final report, 
which will call for privatization and individual retirement accounts.
  Privatizers are trying to claim that the sky is falling--the only way 
that they can justify the drastic changes that they are proposing. But 
the facts are different. Even without any changes, Social Security will 
be able to pay full benefits through 2038 and, after that, it will be 
able to pay 73 percent of benefits. Moderate changes are needed but not 
a privatization plan that will take $1 trillion out of the Trust Fund 
and reduce future benefits by up to 54 percent. It's also reasonable to 
ask President why, if he thinks the situation is so dire, he decided to 
give a $1.7 trillion tax break, the majority of which goes to the 
wealthiest Americans, before taking steps to protect Social Security.
  I want to draw my colleagues' attention to a statement by AARP on the 
interim plan, which I think says it best: the Commission is out of the 
``mainstream'' and the interim report is just a ``public relations'' 
ploy to undermine the basic guarantee of Social Security that will lead 
to ``a dramatic overhaul of Social Security that would lead to cuts in 
guaranteed benefits and shift financial risk to individuals.''

 Statement by AARP Executive Director William D. Novelli on the Draft 
               Interim Social Security Commission Report

       Washington, July 19.--The following is a statement by AARP 
     Executive Director William D. Novelli on the Draft Interim 
     Social Security Commission Report:
       The President's Social Security Commission continues to 
     work toward a predetermined outcome--a dramatic overhaul of 
     Social Security that would lead to cuts in guaranteed 
     benefits and shift financial risk to individuals.
       Today's draft interim report puts forward a fundamentally 
     flawed and biased view of the nature and purpose of Social 
     Security. It implies that the program is riskier than private 
     investment. It recycles old alarmist arguments that portray 
     the financial shape of Social Security in the worst possible 
     light. The rhetoric in the report demonstrates how far 
     outside the mainstream the Commission appears to be headed, 
     referring to Social Security as a ``novelty'' and calling the 
     system ``broken.''
       The draft report lays the public relations groundwork for a 
     campaign to change the fundamental nature of Social Security. 
     It argues for turning Social Security into a system of 
     wealth-building. But Social Security was designed to provide 
     income protection and a floor of financial security. For 
     many, especially women and minorities, Social Security is the 
     only income-protection they will have, providing them with a 
     lifetime, guaranteed benefit that is adjusted annually for 
     inflation. The report ignores the fact that other vehicles 
     currently exist for wealth-building through personal savings 
     and employer provided pensions.
       Individual accounts do not address Social Security's long-
     term financing issues. Add-on accounts--which have merit--can 
     add value on top of Social Security, but taking money from 
     workers' Social Security contributions to fund new private 
     accounts only worsens Social Security's ability to pay 
     today's retirees and advances the date of insolvency.
       Social Security is the bedrock of our nation's income 
     security system. To preserve this benefit for future 
     generations, the Commission should focus on all potential 
     options and tradeoffs, rather than a narrow and fundamental 
     restructuring of the program. The sooner the nation begins to 
     address the program's long-term financing needs, the more 
     moderate the changes that are needed and the more time 
     provided for those affected to adjust their plans.

     

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