A heavy debt for future generations

by Edward J. McElroy

AFT President

The party’s over. The tax-cut extravaganza that was the chief domestic priority of President Bush’s first term has given way to a groaning deficit of record proportions.

The Bush administration intends to trim the deficit by cutting domestic programs and services. But if you think the administration has set its sights on frivolous pet programs and pork-barrel spending, think again.

President Bush recently delivered a budget that would significantly reduce funding for education, food stamps, Medicaid, child care for low-income children and numerous other domestic programs that are often lifelines for those least able to weather the cuts.

The budget doesn’t even include the enormous costs of the war in Iraq and the private Social Security accounts President Bush has proposed. Officials say even sharper reductions are on tap.

No one likes a runaway deficit, but they don’t like to be hoodwinked, either. The Bush administration has sidestepped the fact that the cuts it proposes are direct tradeoffs for the lavish tax-cut spree that sent the deficit spiraling upward.

Isaac Shapiro of the Center on Budget and Policy Priorities likens this move to an “unusual Texas two-step.”

The administration “gladly took step one, pushing for unpaid-for tax cuts,” Shapiro wrote recently. “But it conveniently hid the less pleasant second step: paying for those tax cuts with program reductions.”

And now comes the big skunk at the garden party—the Bush administration’s proposed changes to Social Security. The administration claims that radical changes to Social Security, including privatization, are necessary to maintain its solvency.

In truth, Social Security is not “heading for an iceberg” or about to be “bankrupt,” despite the doom-and-gloom campaign administration officials are peddling in order to sell private accounts.

Like many people, I agree that appropriate steps must be taken to maintain the integrity of this program upon which millions of current and future beneficiaries rely. Instead of promoting judicious remedies, however, the Bush privatization proposals would impose drastic benefit cuts and new threats to the stability of this tremendously successful program.

Privatizing Social Security would add $2 trillion to the already runaway federal deficit and do nothing to enhance the program’s solvency.

In fact, in order to restore solvency to a privatized Social Security program, younger workers’ benefits would have to be cut by 26 percent to 45 percent—a prospect that is totally unacceptable. Analyses of privatization proposals show that younger workers will get hit twice: once with a reduction in Social Security benefits and again with the higher tax burden they will be forced to carry to pay off the grossly expanding federal debt.

Privatizing Social Security and reducing benefits would jeopardize not only younger workers’ long-term retirement benefits, but also the disability and survivor benefits that more than 14 million Americans now rely upon. It is safe to assume that few of them ever anticipated needing these life-saving benefits, but one in five workers will become disabled while employed.

The AFT executive council approved a statement at its February meeting calling for appropriate steps to safeguard Social Security and cautioning about the destabilizing effect privatization would have on this program. The statement reaffirms the AFT’s commitment to working with members of Congress, the labor movement and other allies to strengthen Social Security to ensure that it will provide its promised benefits for generations to come.

These may be high times for the biggest beneficiaries of President Bush’s tax giveaways, but it is going to feel like the morning after for many more Americans left to pay the price.

Cuts that decimate programs that should be national priorities and punish those who can least afford it are a reflection of skewed values. I, for one, will not drink to that.