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Leaked GOP Memo: Privatizing Social Security Would Be “One of the Most Significant Conservative Governing Achievements Ever”

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Vice President Dick Cheney gives a major address calling for radical overhaul of social security. We speak with Roger Hickey, co-director of the Campaign for America’s Future and a leader of a coalition to protect social security. [includes rush transcript]

Last week, an internal White House memo titled “Some Thoughts on Social Security,” was leaked to the press. The memo was written by Peter Wehner, an aide Karl Rove in the Office of Strategic Initiatives. In it, Wehner writes “If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever. The scope and scale of this endeavor are hard to overestimate.” The memo goes on to outline the strategies and talking points necessary to reform Social Security.

One week after the Jan. 3rd memo, the White House has kicked off an election-style campaign to promote President Bush’s Social Security reform plan. At a White House forum billed as a “conversation on Social Security”, Bush painted a dire picture of the current system, warning younger workers that Social Security “will be flat bust, bankrupt, unless the United States Congress has got the willingness to act right now.”

In an interview with USA Today, Bush said members of Congress who don’t confront Social Security’s problems may pay a price. He said “If people shy away from working together to solve the problem, there will be a political consequence.”

Meanwhile, Vice President Dick Cheney yesterday spoke before an audience of college students and administrators at The Catholic University of America. He spoke about the so-called “coming crisis” of Social Security and argued for the privatization of parts the system. This is an excerpt of what he had to say.

  • Vice President Dick Cheney, speaking at Catholic University
  • Roger Hickey, co-director of the Campaign for America’s Future and a leader of a coalition to protect social security.

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This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: Meanwhile, Vice President Dick Cheney spoke before an audience of college students and administrators at the Catholic University of America yesterday. He spoke about the so-called, quote, “Coming crisis of Social Security,” and urged for the privatization of the system. This is an excerpt of what the Vice President had to say:

VICE PRESIDENT DICK CHENEY: The time has come for an honest, straightforward and realistic discussion about the future of the Social Security system. The system has been in steady service, uninterrupted for nearly 70 years. It has fulfilled the promise announced by President Franklin Roosevelt, providing vital income to millions of seniors and assuring generations of working people their retirement years would have some decent measure of security. For today’s generation of senior citizens, the system is strong and fiscally sound. But younger workers are understandably concerned about whether social security will be around for them when they need it. The problem is simple to state — with an aging population and steadily falling ratio of workers to retirees, the system is on a course to eventual bankruptcy. Social Security was designed in 1935 for a different world than the one we live in today. It is a pay as you go system, in which the benefits that go to current retirees come directly from the payroll taxes of current workers. It is also worth noting that in 1935, the average life expectancy in America was about 60 years. Meaning that many people would not live long enough to become eligible for retirement benefits. So, when the program was still new in the 1940’s, there were 41 workers paying into the system for every retiree drawing benefits. Over time, as more and more retirees entered the system and stayed in the system for a longer period, the number of workers per beneficiary continued to decline. By the 1950’s, about 16 workers paid in for every person drawing out. Today, it’s about three workers for each beneficiary, and by the time our youngest workers, those just entering the workforce today, turn 65, the ratio will be down to two workers for each beneficiary. At present, Social Security operates with a substantial cash surplus, but very soon, the greatest test of the Social Security system will be upon us. The first members of the baby boom generation are reaching age 60, and they look forward to long, active and healthy lives. In just a few years, their generation will begin retiring and collecting benefits and the surpluses will begin to decline. By 2018, Social Security will begin paying out more than it receives in payroll taxes. From then on the shortfalls will grow larger every year. Until 2042, when the Social Security trustees estimate the system will reach fiscal collapse. By that point, with the projected shortfall in the trillions of dollars, the government would have no option other than to suddenly and dramatically reduce benefit payments by over 25%, or to impose a massive, economically ruinous tax increase on all American workers.

AMY GOODMAN: Vice President Dick Cheney speaking at Catholic University yesterday in Washington, D.C. We are joined in our Washington studio by Roger Hickey, Co-director of the Campaign for America’s Future, a leader of a coalition to protect Social Security. Welcome to Democracy Now!

ROGER HICKEY: Thank you, Amy.

AMY GOODMAN: Can you respond to what the Vice President laid out?

ROGER HICKEY: Well, first, it should be noted that there were demonstrators who met him at Catholic University, and remained outside throughout the speech. President Cheney — Vice President Cheney is doing exactly what President Bush and the rest of his campaign have been doing since the election. They have been trying to scare the American people into thinking that there’s some kind of a crisis facing Social Security. It’s very, very parallel to the scare tactics they used around weapons of mass destruction in Iraq. You will see a steady drumbeat from here through the summer of representatives from the administration trying to convince us that somehow, as Cheney said, Social Security faces a fiscal collapse. Well, that is just bald-faced lies. It is designed to sell people on a program that will eventually dismantle Social Security, and the response that we have to say is, look, there are plenty of people who will be paying into the Social Security system in 2050 and 2060. In the worst case scenario, if we did nothing to the Social Security system, we might have to reduce benefits by 20%, 25% in 2052. Until then, we can pay full benefits. Social Security may be facing a challenge in the future, sometime after the baby boomers retire, because we have this trust fund that we have created, but nowhere near a fiscal collapse, and nothing like the time frame that the administration is talking about.

JUAN GONZALEZ: Well, Roger Hickey, I’d like to ask you, first of all this concept of Social Security going bankrupt, since it is a government guaranteed system, and it’s a pay as you go system, it’s — it doesn’t seem to be more likely than for instance the Defense Department going bankrupt, or the defense budget going bankrupt, but I’d like to ask you, this whole issue of a trust fund — there have been allegations that the government — this surplus that has been building up all of these years as baby boomers have been paying into it, that both Democrats and Republicans over the years have been dipping into this trust fund. Could you explain how the trust fund works, and whether it’s true that there have been — there has been raiding of the trust fund by previous administrations?

ROGER HICKEY: For the last 20 years or so, we have all been paying a little extra. It’s been more than a pay as you go system. We have been paying extra FICA taxes to get ready for the baby boom retirement. That trust fund is building up government bonds. They’re as good as the government bonds that the Japanese and the Europeans buy from the Treasury. If we were to announce as some conservatives have, that somehow that trust fund doesn’t exist, it would be tantamount to the U.S. government announcing that they were defaulting on their bonds. The problem, of course, is that the administration, this administration especially, has run up big deficits by cutting taxes for the very wealthy, and now they’re doing a bait and switch. They’re trying to say, well, we don’t have the money in the trust fund. Of course, we do. And of course, that money will be used for the baby boom retirement. It’s really, the problem that faces Social Security way out in the future is that we’re all living longer. It’s not the baby boomers. We’ll all be dead by the time — or very, very old by the time that the challenges hit the Social Security system. Not to say that we shouldn’t tweak and fix the system now, but keep your eye on the ball. This administration is trying to make people afraid that the Social Security system is going to collapse, and therefore, they’re trying to get us to all buy their plan to cut Social Security benefits, and privatize the Social Security system right now.

AMY GOODMAN: Roger Hickey, there’s a piece in today’s Washington Post that talks about the campaign that’s being launched by the Bush administration saying, President Bush plans to reactivate his re-election campaign’s network of donors and activists to build pressure on lawmakers to allow workers to invest part of Social Security taxes in the stock market. White House allies are launching a market research project to figure out how to sell the plan in the most comprehensible and appealing way, and Republican marketing and public relations gurus are building teams of consultants to promote it. What exactly is happening right now?

ROGER HICKEY: Well, this is going to be a campaign run by Karl Rove and Ken Melman and the people who ran the President’s re-election campaign. They have allies. Look for groups already advertising, the Progress for America Organization, funded by contributors to the Bush campaign. The Club For Growth. They’re going to be raising somewhere in the neighborhood of $100 million to sell this privatization plan. But we shouldn’t worry too much. So far, the President has been talking in vague terms about, “Wouldn’t you like to have some private accounts.” Now because he’s trying to pass something this year, the real details which are very, very unpopular, are coming out. The fact is that inherent in their plan is a 40% cut for young workers in terms of their retirement benefits under Social Security. They are going to have to come up with a way to finance a $2 trillion transition cost that they simply don’t have the money for. So, what we’re seeing in the last two weeks is a lot of details about their plans coming out in the press, and those details are very unpopular when the American people are asked, “Do you like private accounts?,” they sort of say, “Well, maybe.” But when they’re asked, “Would you like private accounts if it means cutting your retirement benefits in the future?” They turn very, very strongly against it. We have a campaign that is going to be big money on one side, and the American people on the other educating themselves about the details of the Bush plan.

JUAN GONZALEZ: Could you talk a little bit about why this is happening, why Bush and the Republican party are so hell-bent on pressing this campaign forward? I know in the Wall Street Journal in the days after the election in November said that one of the — one of the industries most expecting to benefit from the new administration was going to be the Wall Street firms that would be in essence managing all of these private — private retirement accounts that the President hopes to be able to get for the American people. Are there any estimates of how much of a boon this would be to Wall Street?

ROGER HICKEY: Well, it would mean trillions of dollars in terms of management fees that would erode small accounts that would be set up under this plan. So, yes, Wall Street has a motivation, but I think that really, it’s broader than that. The Bush administration and the people around them really are out on an ideological mission to dismantle affirmative government. And therefore, they know that if they can get away with dismantling the Social Security system, the very, very popular retirement social insurance system that Americans have supported for decades, if they can dismantle that and privatize it as part of their “ownership society,” the slogan of which ought to be: “You’re on your own, buddy,” that means that they can get away with practically anything. They can dismantle regulation. They can really go about the — their whole agenda of dismantling government. It’s an ideological fixation with them, and it’s going to be an epic test with the very wealthy corporate America and Bush supporters on one side, and on the other side, the organizations that represent the American people. Labor, women’s organizations, retiree groups around the country, AARP has just gotten into this battle. We have got a sizable coalition on the other side which is going to be very, very active at the grassroots level talking to members of Congress, and there are a lot of Republican members of Congress who are caught in the middle. They are very, very worried about the fiscal irresponsibility of this plan, about the idea of cutting benefits for their constituents, and I think that this is a battle that Americans, not the Bush administration, are going to win.

AMY GOODMAN: Roger Hickey is with us, Co-director of the Campaign for America’s Future, part of a coalition to protect Social Security. The other day we called the Social Security hotline to get some information. When you’re put on hold, this is what you hear:

SOCIAL SECURITY HOTLINE: Thanks for holding. A representative will be with you shortly. Did you know that the 76 million strong baby boom generation will begin to retire in about 10 years? When that happens, changes will be need to be made to Social Security, changes to make sure there’s enough money to continue paying full benefits, and most experts agree, the sooner those changes are made, the less they are going to cost.

AMY GOODMAN: Roger Hickey of the Campaign for America’s future. Your response to this message on hold, taxpayer funded Social Security administration where people call to get information.

ROGER HICKEY: Well, this is just one of the campaigns that the administration is doing. This is not unusual. We have seen them do packaged pseudo-newsclips to sell the President’s Medicare Prescription Drug Plan to help the H.M.O.'s and the drug industry. We have seen them pay pundits in Washington to support the so-called “No Child Left Behind Act.” That's been in the news lately. And they are simply using what should be a government service run by civil servants to propagandize the American people who are looking for help dealing with Social Security. The union representing workers who work in the Social Security Administration, the American Federation of Government Employees, is protesting this. They’re manipulating their workers, forcing them to propagandize the public. Senator Lautenberg and others have protested on the Senate floor and are looking into yet another investigation of the inappropriate use of government funds to propagandize in the middle of this very hotly contested legislative battle here on the future of Social Security. It is totally inappropriate and probably illegal.

JUAN GONZALEZ: When it battle begins to move to the Congress, can you give us an idea of who are some of the key Senators or members of the House of Representatives that would be influential in terms of determining, or maybe on the fence in terms of determining which way this thing goes?

ROGER HICKEY: Well, it’s interesting. In the past, the Bush administration has had Republicans very, very united in voting their tax cuts and on the Prescription Drug Plan, both of which were an easy vote for Republicans offering a tax cut or a benefit to their constituents. It’s really the rank and file Republicans, not the leadership, but the rank and file Republicans, the little guys, the back benchers. Congressman Davis of Virginia, who is very worried about having to vote for privatization. He’s a Republican, former head of the Congressional Campaign Committee for the Republicans, estimates that there’s about 30 to 40 Republican Congress people who really don’t want to vote to cut benefits and privatize Social Security. So, it’s really going to come down to keeping the Democrats solidly opposed and so far, they have been, and then American people really talking to those 30 or 40 Republicans, and making sure that they stick with their convictions. This is a winnable fight. The house leadership is — on the Republican side, is going to be with the President. But the people and the Republican rank and file as well as the Democrats under Congresswoman Pelosi and Harry Reid, are going to stay pretty united against privatization. It’s a battle that’s winnable.

AMY GOODMAN: Roger Hickey, I want to thank you for being with us. Co-director of the Campaign for America’s future.

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