We'll compromise, but no privatization

by Steny H. Hoyer

For Immediate Release:

May 3, 2005

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Opinion, Published in the Washington Examiner

As President Bush and administration officials look back on their campaign to sell privatized Social Security, it is increasingly clear that Americans are just not buying. And after the president's recent press conference, in which he proposed large benefit cuts, the American people are even more skeptical.

The fact is, the more voters hear about this proposal, the more they oppose it. The president's continued insistence on private accounts is only delaying the serious, bipartisan discussions that could and should be taking place on how to ensure Social Security's solvency.

Consider, for example, the recent findings of three respected national polls:

 
* A Hotline poll found 58 percent of Americans disapprove of Bush's handling of Social Security, while only 29 percent approve.

* A USA Today/CNN/Gallup poll found the public's urgency on Social Security has dropped, as the president's road trips crisscrossed the country. The number saying it's extremely important for Congress to deal with Social Security this year fell from 41 percent in early February to 37 percent. And, for the first time, a majority oppose his plan.

 
 
* A New York Times/CBS News poll found that 69 percent of respondents thought private accounts were a bad idea when they were told that the accounts would result in benefit reductions.

Skepticism understandable

The widespread skepticism about the president's privatization proposal is not hard to understand. The American people - like the voters who attended my recent town hall meetings - seem two steps ahead of the president.

 
 
They recognize (and even the president has been forced to admit) that the creation of private accounts won't do anything to fill the anticipated $3.7 trillion shortfall during the next 75 years.

"Fix the whole in the safety net should have been - and should be - the message," says Sen. Lindsey Graham, R-S.C., who calls the creation of private accounts a "sideshow."

David Walker, the U.S. Comptroller and a Republican, told the House Ways and Means Committee, "Individual accounts by themselves will not lead the system to sustainable solvency."

Walker went on to point out that creating private accounts would actually exacerbate Social Security's problems and hasten the date of insolvency, which is now projected ito occur in 2042.

Furthermore, privatization proponents have still failed to explain how to pay transition costs - nearly $5 trillion over 20 years - necessary to set up private accounts.

Making up lost revenue

Social Security is a pay-as-you-go system, which means revenues raised through payroll withholding on today's workers go right back out to pay today's retirees. If today's workers are permitted to divert part of their payroll tax, the government would have to figure out how to make up those lost revenues.

To date, the president has simply suggested the federal government would borrow to pay the costs. This would drive our nation deeper into debt and undermine our ability to ensure the future solvency of Social Security.

Democrats recognize that Social Security faces long-term challenges. We are absolutely committed to strengthening the program for this and future generations.

However, we believe that the creation of private accounts within Social Security is a non-starter. Such accounts will not strengthen the program but sabotage it.

The issue of Social Security, and retirement security generally, commands a bipartisan solution. The American people demand and deserve no less. I stand ready to engage in such an effort with the president and my Republican colleagues as soon as they heed the views of voters and put aside this unworkable privatization proposal.