February 09, 2005

Social Security > Democrats Were for Social Security Reform Before They Were Against It

So the Democrats are opposing Bush's proposed partial privatization of Social Security as part of an effort to save it in the long run. That's fine, but if it's such a bad idea then why did so many Democrats previously support some variation of privatization or investment in the private sector?

Sen. Dick Durbin (D-IL) Press Release: “Durbin Said Due To The Increasing Number Of ‘Baby Boomers’ Reaching Retirement Age, Social Security Will Be Unable To Pay Out Full Benefits … But The Sooner Congress Acts To Avert This Crisis The Easier And Less Painful It Will Be.” (Sen. Dick Durbin, “Reforming Social Security,” Press Release, 9/15/98)

Sen. Byron Dorgan (D-ND): “Fixing Social Security Is An Urgent Priority. It Ought To Be At The Top Of Both Parties’ Agendas.” (Sen. Byron Dorgan, “Fixing Social Security Must Top Both Parties’ Agendas,” Roll Call, 12/6/99)

Sen. Byron Dorgan (D-ND): “The Potential [Social Security] Crisis Should Be Viewed As An Enormous Success, Because It Means That We Are Living Longer And Healthier Lives.” (Betty Mills, Op-Ed, “What Would You Do About Social Security?” Bismarck Tribune, 8/5/98)

Sen. Kent Conrad (D-ND): “I Was At The Social Security Summit At The White House, Along With 40 Of My Colleagues, Republicans And Democrats. And There Was Virtual Unanimity Of Opinion That We Simply Have To Get A Higher Return From The Social Security Investments.” (Fox News’ “Special Report,” 1/20/99)

House Members: Rep. Sander Levin (D-MI): “People Can See, I Think, A [Social Security] Crisis Where There Immediate Family Is Affected Even If Not Immediately … This Is Something That Affects Almost Everybody’s Immediate Family.” (Richard A. Ryan, “Social Security Reform Stalls,” The Detroit News, 2/2/02)

Rep. Charles Rangel (D-NY): “I Am One Democrat That Truly Believes That Democrats Will Not Benefit By Doing Nothing On Social Security.” (Rep. Charles Rangel, Press Conference, 1/21/99)

Rep. Edward J. Markey (D-MA): “I Am An Advocate For Investing A Portion Of The Surplus In The Private Sector …” (Rep. Edward J. Markey, Committee On Commerce, U.S. House Of Representatives, Testimony, 2/25/99)

Rep. Jerrold Nadler (D-NY): “[I]t’s A Way Of Getting More Money – A Higher Return On The Trust Fund, And Is A Prudent And Good Thing To Do.” (Rep. Jerrold Nadler, Press Conference, 1/21/99)

Former Rep. Dick Gephardt (D-MO): “Why Should Social Security Recipients Be Disadvantaged By Not Getting To Be Able To Have Higher Returns Out Of The Stock Market?” (Rep. Dick Gephardt, Press Conference, 1/21/99)

Clinton: President Clinton: “[Investing] Will Earn A Higher Return And Keep Social Security Sound For 55 Years.” (President Bill Clinton, State Of The Union, 1/19/99)

President Clinton: “[W]hat I Believe We Should Do Is To Invest A Modest Amount Of This In The Private Sector, The Way Every Other Retirement Plan Does. The Arizona State Retirement Plan Does; Every Municipal Retirement Plan Does; Every Private Plan Does.” (President Bill Clinton, Remarks To The Citizens Of Tucson On Medicare And Social Security, Tucson, AZ, 2/25/99)

President Clinton: “[E]ven After You Take Account Of The Stock Market Going Down And Maybe Staying Down For A Few Years, Shouldn’t We Consider Investing Some Of This Money, Because, Otherwise, We’ll Have To Either Cut Benefits Or Raise Taxes To Cover Them, If We Can’t Raise The Rate Of Return.” (President Bill Clinton, Remarks Via Satellite To The Regional Congressional Social Security Forums, Albuquerque, NM, 7/27/98)

Bill Clinton in 2002:

When I left office, there was enough money to keep Social Security going till 2053, enough money to keep Medicare going tail 2027, through half the life of the baby boomers. I don't know what the latest numbers are going to show but they won't be good. If we don't modify the tax cut to have more tax cuts now but we reinstate fiscal responsibility over the long run, we're going to be in real trouble there. So, what's our option? If you don't like privatizing Social Security and I don't like it very much, but you want to do something to try to increase the rate of return, what are your options? Well one thing you could do is to give people one or two percent of the payroll tax, with the same options that Federal employees have with their retirement accounts; where you have three mutual funds that almost always perform as well or better than the market and a fourth option to buy government bonds, so you get the guaranteed social security return and a hundred percent safety just like you have with Social Security.

FDR in 1935 via James Taranto:

In an address to Congress on January 17, 1935, President Roosevelt foresaw the need to move beyond the pay-as-you-go financing of the current Social Security system. "For perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions," the president allowed. But after that, he explained, it would be necessary to move to what he called "voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age." In other words, his call for the establishment of Social Security directly anticipated today's reform agenda: "It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans," FDR explained.

"What Roosevelt was talking about is the need to update Social Security sometime around 1965 with what today we would call personal accounts," says one top GOP member of the Ways and Means Committee. "By my reckoning we are only about 40 years late in addressing his concerns on how [to] make Social Security solvent."

UPDATE February 10: MediaMatters argues, probably correctly, that the FDR quote is out of context, and means adding an additional, voluntary investment, but not replacing the underlying, mandatory investment. Jane Galt responds to the MediaMatters complaint.

Senator Harry Reid (D-NV) in 1999:

Most of us have no problem with taking a small amount of the Social Security proceeds and putting it into the private sector.
Posted by lesjones



Comments

It's not about Democrat/Republican. It's about who finances the politician's campaigns. Investment houses were buying Democrats in 1998, and they're buying Republicans now.

Posted by: hellbent at February 09, 2005

I'm the one who told Bill Clinton how to fix Social Security...and he said it in summary form in his 1998 State of the Union Address.

I've been telling people how to do it since 1964, full time since 1995--and I am the only one in the world who knows how to fix it--and the only one who also knows how to fix medical care also.

You are welcome to call me anytime. I promise you will learn more about these systems than anywhere else, including why they have never been fixed.

I'm a retired health care and pension consulting actuary and one of the 5 reasons we have never fixed them is that actuaries are a crooked profession--some are trying to privatize Social Security so they can flimflam the public with lousy 'investment products such as whole life insurance; others are trying to privatize Medicare while producing products that flimflam the public and still others are working hard with corporate pension plan sponsors to take assets from thse plans and screw pension participants out of portions of their benefits. The latter alone is a trillion dollar scandal.

andyclang@comcast.net

610-738-9678

Andy Lang

Posted by: Andy Lang at June 21, 2007

Like most of Congress and the two Presidential candidates, and most people elsewhere, they need major educating on how pensions work.

It is easy to find life insurance actuaries who wish to privatize Social Security and health insurance actuaries who want to privatize Medicare, and sadly pension consulting actuaries who have taken the money and run with it in the private pension sector, but only one who tells it like it is and is strongly opposed to privatization and knows which pension laws and accounting rules that were bad and how to fix them and also Social Security and health care.

(But it is too late for private pension systems to ever recover--nor for that matter any employee benefit that does not help corporations in an unforgiving highly competitive global environment where cheap labor is plentiful.)

He also knows that for most people it is impossible to have decent affordable pensions and health care unless you set aside money long in advance of it being needed and use the compound interest on those funds, mostly from common stock, to help pay the majority of the benefits.

He also knows that you cannot get those returns from individual accounts, but you can from a process that has been around for 250 years.

Actuarial Advance Funding--made its way into the pension industry in 1917 and ultimately morphed into an Actuarial Cost Method called The Entry Age Normal Cost Method. It was used by well over 90% of ther large defined benefit pension plans in 1980, right before the bad guys destroyed that industry, along with millions of employees right to a pension.

This method not only lowers cost dramatically by virtue of the investment returns, but also stabilzes the cost greatly and does eight other things all at once--each necessary for a pension system or for health care to work correctly.

Posted by: at July 22, 2008
Post a comment










Remember personal info?







Terms of Use