Administration’s ‘crisis’ a facade for limiting government

President Bush talks about Social Security as a program in “crisis,” but an internal White House memo politicizing the program sheds light on the administration’s ultimate goal.

“At the end of the day, we want to promote both an ownership society and advance the idea of limited government,” according to the innocuously titled memo “Some Thoughts on Social Security.”

Written by Peter H. Wehner, White House director of strategic initiatives, who is reportedly an underling of President Bush’s top political strategist Karl Rove, the memo was not intended for public consumption. But that is exactly what it is getting, thanks to the Wall Street Journal Online, which posted it.

The memo makes clear that building support for privatization and benefit reduction is a priority of the first order in Bush’s second term. It states that in addition to allowing workers to divert a portion of their Social Security payroll tax into privately managed accounts, the program must cut benefits to retirees.

The premise of the White House’s argument that Social Security should be overhauled, Wehner suggested, is that “the current system is heading for an iceberg.” Moreover, he recommended touting the “notion that younger workers will receive anything like the benefits they have been promised is fiction, unless significant reforms are undertaken.”

“Social Security is not going broke,” according to the Economic Policy Institute, which cites two different reports as evidence—the 2004 annual report of the Social Security trustees and the nonpartisan Congressional Budget Office (CBO).

The trustees forecast that Social Security trust fund assets will be gone in 2042, and that the money coming into the system will be less than the amount going out. The CBO, on the other hand, projects a shortfall in 2052.

Some critics of the president’s plan point to an inherent funding flaw: The cap on earnings subject to the Social Security tax. In 2004, earnings up to $87,900 were subject to the tax. In 2005, the ceiling is $90,000. Earnings above the ceiling are not subject to the tax.

“As you know, our advocacy for personal accounts is tied to our commitment to an Ownership Society—one in which more people will own their healthcare plans and have the confidence of owning a piece of their retirement,” wrote Wehner.

Noting that “the president remains flexible on tactics—and rock solid on the principles,” Wehner wrote that “for the first time in six decades, the Social Security battle is one we can win—and in doing so, we can help transform the political and philosophical landscape of the country.

“We have it within our grasp to move away from dependency on government and toward giving greater power and responsibility to individuals.”

Delegates to the AFT’s 2002 convention overwhelmingly passed a resolution opposing efforts to replace Social Security’s guaranteed benefits with personal retirement accounts.

The resolution pledges union support for a Social Security system that maintains economic security for current and future retirees and provides guaranteed universal insurance protections for surviving spouses and children and disabled and retired workers.