For the first 18 years of his congressional career Dick Gephardt (D-MO) served in the majority. According to Gephardt’s own official web site, “as a House freshman, he was given the rare opportunity of serving on both the Ways and Means and Budget Committees, where he quickly became a national leader on health care, trade, and tax fairness.” Apparently, Gephardt considers himself something of a leader on national economic policy.
For every single year of Gephardt’s bright career in the majority, the federal government ran a budget deficit. Most of those years, the government hid the size of the deficit by using Social Security payroll taxes to pay for government expenses other than Social Security. It was WorldCom style accounting.
At the very least, it was a political scam, no matter how you want to define it. Gephardt and his colleagues (in both parties) told the taxpayers that if you allow us to raise the payroll tax, Social Security will start running a surplus and the government will save the surpluses in the Social Security trust fund to pay for the coming retirement needs of the baby boom generation. So, on the one hand, we were told that there was such a thing as a “Social Security Trust Fund.” At the same time, the government took the money collected from the payroll taxes and spent it on other government programs, like education, the environment, parks, roads and bridges. And to add to the scam, we were told that the “annual” federal budget deficit was smaller than it really was. Social Security funds obligated to future needs were actually spent on current programs, while the Social Security system received IOUs.
They didn’t try and have it both ways — they had it six ways to Sunday. “We’re saving for Social Security.” “We can spend more because the deficit’s smaller.” “We have a Trust Fund (with a lock box).” Of course, much like Enron and WorldCom workers and shareholders, the U.S. taxpayer is going to pay the real price for massive Social Security scam the politicians have perpetrated. Before too long, the payroll tax will stop generating a “surplus” and the taxes the government collects for Social Security will be less than the government has to pay out in benefits. And then we will all discover that the so-called trust fund has no lock box and not a single penny of actual money. It’s all been spent. All there will be are these little pieces of paper that say “go borrow some money to pay off this note.” At that point, we’ll have to raise taxes, cut benefits, and reduce spending in other areas or most likely, all three.
Now, granted, Dick Gephardt is not the only politician guilty of selling this scam to the taxpayers. Politicians in both parties have for years shaded the truth about the accounting side of Social Security. But, Gephardt is unique in how he has deliberately used the corporate accounting scandals as an excuse to keep the Social Security accounting scandal in place. Again, to quote from Gephardt’s web site, “Let me just tell you that the former Enron and WorldCom employees I’ve been talking with think Social Security privatization is a dangerous proposal that would put their retirement income and security at risk. These people lost their 401(k)s, their jobs and in some cases, their entire careers.”
Great rhetoric. Particularly since it says beautifully what is absolutely not true. Social Security, in its current form, isn’t just at risk it is, in fact, completely unsustainable. We will either need to raise payroll taxes dramatically or use general tax revenues to cover the shortfall. (Or some combination of both) That isn’t a theory. It is not a conservative ideological perspective. That’s a basic fact, based purely on demographics.
Gephardt is exploiting a real economic tragedy to perpetuate a political scam that he’s been committing since he was a freshman congressman who was “given the rare opportunity of serving on both the Ways and Means and Budget Committees.” And, of course he isn’t just issuing disingenuous press releases. He’s out raising millions of dollars of soft money (that he has also railed against) to finance a mass media campaign to defeat Republicans who want to at least try and fix Social Security.
Mr. Gephardt joins all of us in our outrage at the corporate accounting abuses. As he said, “As we’ve learned from Enron, WorldCom, Tyco, Global Crossing, Stanley Works and others, thousands of hard-working employees have suffered due to corporate mismanagement and abuse.” He wants, “reforms that are black and white. If we continue to practice corporate accounting in shades of gray, our economy will suffer.”
People in glass houses shouldn’t throw stones and Rep. Gephardt’s career includes a long, sorry trail of covering up political accounting scams and at best introducing shades of gray into the Social Security debate. It appears he plans to add a new chapter to this scam this fall with what promises to be one the harshest, best-funded and least honest Democrat campaign in modern history.