A state activist group called on U.S. Rep. Mark Green to break away from President Bush on plans to “privatize” Social Security.
Speaking at a news conference in front of Green’s Green Bay office, Nathan Sooy of the Wisconsin Citizen Action Fund quoted the group Institute for America’s Future as cutting benefits by 25 percent for a 35-year-old worker today.
He said the group would appear at events where Green is appearing to bring pressure about the issue.
The House of Representatives is in recess and Green was not at the Green Bay office. Sooy said he received a letter from Green that said he was “opposed to the privatization of Social Security. What’s really at issue is the idea of personal retirement accounts to supplement the current system.”
Sooy said Green’s comment was “doubletalk.”
“He’s trying to say that this is not privatization when what we’re really talking about it a diversion of tax money into these private investment accounts,” Sooy said. “Privatization is going to add $2 trillion to the deficit.”
Sooy spoke several times about the “president’s plan,” although no final plan has been announced by the White House or sent to Congress. Most of the numbers used were from a 2001 report by a commission that has been cited as a model for Social Security changes.
Another group, Freedom Works, is pushing a plan put together by U.S. Reps. Paul Ryan, R-Milwaukee, and John Sununu, R-New Hampshire.
The plan, according to Freedom Works state director Cameron Sholty, would allow individuals to put half of their payroll taxes in private accounts they would own and control, and that could be passed on to their heirs.
“In a married couple, the survivor has to choose between their benefit or their spouse’s benefit. With a PRA they can have both,” Sholty said.
The diversion would be voluntary, he said.
“Since they’re taking money anyway, shouldn’t we seek a higher rate of return?” he asked. Sooy expressed concern about how diverted retirement funds would be handled.
“This plan is going to create a feeding frenzy for Wall Street firms,” he said. “Politicians will decide which firms are hand-picked to make billions of dollars off your retirement funds.”
Sholty countered that the Ryan-Sununu plan would have the PRAs as part of or managed by the Social Security Administration through individual investment boards. “It’s not absolute privatization,” he said. “But I think that’s the devil in the details, starting to debate that.”
The situation is being discussed because in 2018, the amount available to Social Security will dip below the amount needed to cover payments to individuals. The time when Social Security would run out of money has been estimated at various times between 2042 and 2054 by various groups.
Sooy said Social Security is not “in crisis.”
“We cannot afford to break the promise of Social Security in a fever pitch to fix a problem that may not exist,” he said. He said taking the 1 percent tax cut President Bush instituted would “go a long way” toward fixing the deficit as would stopping benefits for those making $90,000 or more a year.