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Coalition Criticizes Bush SS Privatization Plan

BY Tom Fahey
by Tom Fahey on 7/24/01.

CONCORD -- A coalition of senior citizens, social workers and Democrats yesterday criticized the Bush Administration's plans for Social Security privatization.

Bush's Social Security study commission meets today to accept a draft of its first report. It calls for allowing part of the current 12.6 percent payroll tax to be used for private investment by individuals.

Critics said yesterday that pulling the money out of Social Security now will mean lower benefit payments and higher retirement age. Benefits will be lower not only for retirees in the future, but for surviving children of those who die prematurely and for the disabled, they say.

"Essentially, privatization promises something for nothing," said Steve Gorin, a professor at Plymouth State College and a member of the National Association of Social Workers.

Social Security is not meant to be an investment program, he said, but an insurance program; a safety net devised to protect retirees from spending their last years in proverty.

Gorin said current projections are that the system will have enough money to fund its obligations through 2038. No radical change is needed, he said.

Others said that the stock market is unpredictable and no place for the uneducated investor. The Standard and Poors index has fallen nearly 30 percent in the past year. Serious setbacks are common even for sophisticated investors, they said. Richard Killion, of the Citizens for a Sound Economy, disagreed with what he heard at the press conference, and argued for the Bush privatization plan. He said the system needs repair and ignoring its problems won't fix anything.

Opponents of change use "scare tactics and demagoguery" to try to keep a flawed system in place, he said. The proportion of workers to beneficiaries in the system has been shrinking for decades.

"It's a recipe for disaster unless we change the system," Killion said. "Do we want to try something new and novel, or delegate the problem to the next generation?"

Democratic Policy Committee figures say that 18,330 New Hampshire residents under 40 get Social Security benefits, nearly 12,000 of them under age 18. One in three beneficiaries receives survivor benefits, not retirement checks, it said. Social Security makes up 90 percent of the annual income for 27 percent of women over 65, the DPC said.

Suzanne Woodward, a retiree from Piermont, said she doesn't feel qualified to invest in the stock market. "I'd be broke. Keep them from passing the buck to us when most of us are not qualified to handle it," she said.

Thomas Hooker, from the National Committee to Preserve Social Security and Medicare, said that if the government puts 2 percent of payroll tax toward private investment plans, it will pull $ 1 trillion out of the system by 2011.

The result will be lower benefits and higher retirement ages, he said.

"Two percent or any percent is too much to be taken out," Hooker said.

He said he will try to arrange a meeting between members of the state coalition and U.S. Sen. Judd Gregg, who has supported a move toward privatization for years.