Social Security: An ‘Absolute Disgrace?’ - Political Opinion

July 10, 2008

During a recent town hall meeting in Denver, CO, Sen. John McCain (R-AZ) called the “present” Social Security “setup” — in which “we are paying present-day retirees with the taxes paid by young workers in America today” — “an absolute disgrace” that’s “gotta be fixed.” McCain’s disavowal of the way Social Security works raises concerns about his commitment to preserving the successful retirement security program, and has even led some economists to question McCain’s basic understanding of the program. In response to McCain’s comments, Gerald McEntee, International President of the American Federation of State, County and Municipal Employees (AFSCME) union, issued a statement arguing that “McCain’s ignorance about Social Security is the real ‘disgrace.’ … Working Americans understand that Social Security is the contract between the generations. It has served our country well since FDR signed it into law.” Former congresswoman Barbara Kennelly, President of the National Committee to Preserve Social Security and Medicare, pointed out thats “since its inception, Social Security has been a pay-as-you-go system. That’s not new and it’s certainly not a disgrace. To suggest that Social Security is fundamentally ‘broken’ because of this fact, shows a lack of understanding of the program, its traditional role and the need to preserve and strengthen it for the future.” McCain’s remarks come on the heels of his support for President Bush’s failed campaign to privatize social security and highlight the inconsistencies between McCain’s rhetoric, policy proposals, and voting record.

MCCAIN’S FLIP-FLOPS ON SOCIAL SECURITY: Currently, McCain says he supports “supplementing the current Social Security System with personal accounts.” But in 2006, McCain voted for and strongly backed Bush’s privatization scheme, which would have allowed workers to “divert a portion of Social Security payroll taxes to fund private accounts.” McCain proposed diverting “a portion of Social Security payroll taxes to fund private accounts” during the 2000 campaign and suggested privatization in 2004 and 2008. In fact, during a March interview with the Wall Street Journal, McCain said, “I’m totally in favor of personal savings accounts…along the lines that President Bush proposed.” When questioned why his website proposed merely “supplementing” the current system with personal accounts, McCain promised to “change the website,” the Journal reported.

BUSH’S FAILED PUSH FOR PRIVATIZATION: Shortly after being reelected in 2004, Bush immediately began a campaign to privatize Social Security. As White House officials told the New York Times in April 2005, conservatives planned to “lure Democrats into negotiations on the program’s solvency and prepare for an endgame in which Mr. Bush will make an all-out push to convince the country that individual investment accounts will reduce the pain of benefit cuts or tax increases.” Realizing that Bush’s proposal would add trillions to the national debt, cut retirement benefits, and raise taxes, the public ultimately compelled the president to end his social security privatization tour. By the end of the campaign, an ABC News-Washington Post poll showed that 64 percent of Americans disapproved of Bush’s handling of Social Security, up from 56 percent in March when the tour began. During a press conference in Oct. 2005, Bush admitted that his reform efforts failed, saying that “there seems to be a diminished appetite in the short term” for dealing with Social Security.

PRESERVING AN EFFICIENT SYSTEM: Americans have a “diminished appetite” for dramatically reforming Social Security because they understand that there is “no Social Security crisis.” Despite conservative fear mongering about the insolvency of the Social Security trust fund, the program is fairly strong. In fact, “Social Security is more financially sound today then it has been throughout most of its 69-year history,” the Center for Economic and Policy Research stated in 2005. In March, “Social Security’s trustees issued a report on the program’s financial status which stated that the program ‘passes our short-range test of financial adequacy.’” According to the Congressional Budget Office, without any changes at all, the Social Security program can pay all benefits though at least 2052. And while McCain has not explained how he would prevent the projected shortfall, progressives have pointed out that the long-term social security shortfall is smaller than the cost of Bush’s tax cuts for the top 1 percent of Americans, which McCain has promised to extend. While McCain often invokes the 1983 Social Security compromise as a model for a bipartisanship solution to prevent the budget shortfall, insuring that the system remains solvent for the indefinite future requires much more moderate proposals.