Talking Points: What to say when you need answers to Social Security Privatization questions

April 1, 2005

When They Say, "Social Security is in crisis and will soon go bankrupt..."

You Say: "Social Security is neither broke nor in a state of crisis. According to 1998 government estimates, trust fund surpluses are enough to cover 100% of benefits for more than 30 years. Modest, prudent changes will be enough to strengthen Social Security for the foreseeable future."

(SOURCE: National Committee to Preserve Social Security & Medicare)

When They Say, "Bush privatization accounts would be voluntary..."

You Say: "The Bush plan is not voluntary -- your Social Security retirement benefits would be cut by at least 40%, even if you do not choose a private account. The average worker would lose $152,000 in benefits in the 20 years after retirement."

(SOURCE: The Century Foundation, Center on Budget & Policy Priorities and the Economic Policy Institute)

When They Say, "You'll make more money with private investments..."

You Say: "The government will take back 70 cents in your Social Security benefits for every $1.00 in your account when you retire - on top of the 40% cut in your earned retirement benefits. (AFL-CIO) For people who choose private accounts, the government would take back 50 cents for every $1.00 in the account. (The Century Foundation, Center on Budget & Policy Priorities and the Economic Policy Institute) Risk must be taken into account too. Between July 17 and September 4 of 1998, the stock market plummeted 20%. If your financial security hinged on selling stocks during those weeks, you could have lost 20% of your investment savings. With privatization there will be a few winners and many losers."

(SOURCE: National Committee to Preserve Social Security & Medicare)

When They Say, "You'll get to personally direct your private retirement investments..."

You Say: "Not true! You don't control your own money - politicians will pick which Wall Street firms control your private investment accounts, a process open to corruption by politics. (AFL-CIO) National administrative costs for Social Security are very low - less than 1% of the program's budget. Diverting money to stocks and bonds would incur the very high costs of brokers' commissions, and mutual fund management fees inherent in buying and selling stocks and bonds.

(SOURCE: National Committee to Preserve Social Security & Medicare)

When They Say, "You'll be able to pass on your retirement investments to your heirs..."

You Say: "For most retirees, there will be nothing left to pass on. The accounts will not be adjusted to the annual cost-of-living and some private investments or annuities cannot be passed on to heirs, but will go back to the government."

(SOURCE: AFL-CIO)

When They Say, "It's unfair that tomorrow's workers will have to support the baby boomers' retirement..."

You Say: "The boomer generation has built a huge surplus that will keep Social Security paying 100% of earned benefits until the year 2042 - but the federal government includes that surplus as part of the general budget where it spends the trust funds to hide the Bush budget deficits. With Bush's Social Security privatization scheme, workers end up paying taxes to support future boomers plus they invest money in their own risky private individual accounts in hopes of building retirement funds for themselves. Worse, today's workers will have to bear the transition costs of switching to privatization, which is estimated to cost trillions of dollars. That undoubtedly means higher taxes."

(SOURCE: National Committee to Preserve Social Security & Medicare)

CONCLUSION

We have time to strengthen Social Security the right way rather than to slash disability, survivors and earned retirement benefits.

First, we must require Congress to pay back the money borrowed from the trust fund.

We could end the "wealthy wage exemption" so CEOs pay the same Social Security taxes on their salaries as we pay on ours.

We could repeal the Bush income tax cuts for the top 1% of taxpayers and we could help working families build private pensions and savings on top of the Social Security.