W.House: Borrowing to Help Fund Social Security Plan $1 Trillion

[Javaman]

WASHINGTON (Reuters) - The White House said on Monday for the first time that President Bush's plan to add personal retirement accounts to Social Security would be financed in part by new government borrowing that could top $1 trillion.

Bush has made reform of the U.S. retirement program a top priority in his second term and will push for creating private accounts in a meeting later in the day with top congressional leaders.

Bush's economic advisers have been analyzing financing options for more than a year. But the White House, until now, had declined to say that borrowing would be used to cover the transition costs. Experts say Bush has few other options because of record federal budget deficits. The president has ruled out tax increases.

"There will be some upfront transition financing that will be needed to move toward a better system that will allow younger workers to invest a small portion of their own money into personal savings accounts," White House spokesman Scott McClellan said.

http://cnn.netscape.cnn.com/news/story.jsp?idq=/ff/story/0002/20041206/1508815919.htm&PhotoID=20041206WASW402D&floc=NW_1-T

[UpInArms]

1. there goes my

$100,000 free lunch.

[Sara Beverley]

29. Why not borrow one-fourth that amount and leave the system alone?

Just add one-fourth of trillion to the pot and the system will take care of itself.

[Massachusetts]

49. "Remember democracy never lasts long.

It soon WASTES, EXHAUSTS, AND MURDERS itself. There never was a democracy yet that did not commit suicide." - John Adams:grr:

[SpiralHawk]

2. Oh, this will help Big Time

Thanks a pantload, BushCo, UnLtd.

We need this like we need another stolen election.

[papau]

34. LA Times write up on borrow now- not later - Bush plan

White House Says Social Security Fix Means Borrowing (will not estimate)



http://www.latimes.com/news/nationworld/nation/la-na-so...

White House Says Social Security Fix Means Borrowing
Analysts put the figure at $1 trillion over a decade. Bush officials offer no amount, but say not restructuring would cost more.
By Warren Vieth and Janet Hook
Times Staff Writers

December 7, 2004

WASHINGTON — The federal government would have to borrow money over the next decade to finance President Bush's plan to create private Social Security accounts, the White House acknowledged Monday.

Independent analysts have estimated the government would initially need to borrow more than $1 trillion. The administration declined to provide its own figure, but said that if the program was not restructured to handle the coming wave of baby-boom retirees, the cost would be $10 trillion. "There will be some up-front transition financing that will be needed to move toward a better system," White House spokesman Scott McClellan said.

The acknowledgment, the most explicit yet by White House officials, came as Bush launched a campaign to build bipartisan support on Capitol Hill for allowing workers to divert some of their Social Security taxes into individually controlled private accounts. The idea is likely to be the most difficult domestic policy initiative of his presidency.

In a meeting with congressional leaders of both parties, the president conceded that his vision for Social Security would require significant short-term (40 year) borrowing, according to a participant in the closed-door session.<snip>

[Chicago Democrat]

3. Bye, bye Dollar! See you later.... So that's why Snow is resigning.

Insane...

Will never pass.

No way no how uh uh

[livinbella]

4. i so do hope you are right

[UCLA Dem]

5. screw social security: so corporations can have more money.

how do they sleep at night?

[Spinzonner]

13. Just crawl right into their coffins

[InvisibleBallots]

18. nothing but theives and crooks

This is plain and simple theft.

[tsuki]

32. On a pile of money. Euros probably.

[patdem]

6. They are going to borrow from the investors to invest??

This is pure insanity!!! We need to get this fool out of there before he steals $1 Trillion dollars from the treasury..and every man woman and child for the next 3 generations!

INSANITY I TELL YOU!!!

[Deja Q]

12. Not insane to them. They get their social security. They are making

slaves out of the rest of us.

It adds a new dimension to the phrase "Ask not what your country can do for you, but what you can do for your country.", doesn't it?

[zann725]

30. That's why we MUST get Kerry in the Whitehouse on Jan 20. MUST!

This can NOT wait 4 more years. Nor can our Military Budget...or the Planet.

I am SOOOO tired of hearing we're 'not expecting to change the election result.' That 'We're just looking..."

NO! Democracy and this planet as we know it are evaporating before our eyes. We can NOT lose Social Security. We can NOT let those thieves clean-out the monies already there in order to line their own pockets, or to finance THEIR "colonization" of the world.

And most importantly, we can NOT let the Elderly and the Disabled live in cardboard boxes in the street because they didn't have 'time' to invest in a 'private account' before the proverbial Social Security 'rug' was pulled out from under them.

To quote Nancy Reagan, "Just say NO."
:kick:

[shuffnew]

42. That's why the "fraud" to try to keep Kerry out-- yes, reverse it!!! n/t

:kick:

[leesa]

53. He's stolen far more than that. That much was stolen before 9-11.

DOD "lost" it.

[eternalburn]

7. It is so obvious that....

... * has never had to balance a checkbook.

[lovuian]

8. Baaaahaaawaaahaa I can't wait for the Repubs to vote for that

this is incredible fiscal lunacy!!! Just to destroy Social Security they really do want people to die on the streets!!!

[snippy]

9. I don't think borrowing another trillion is the problem with Bush's plan.

Everyone has always known that the amounts in the Social Security trust fund would someday have to be borrowed in the bond market in order to pay future benefits. That is one reason the trust fund always has been included as part of the national debt. Depending on the details of Bush's plan, borrowing the transition costs may just be bringing that borrowing forward in time. The details of Bush's plan will have to address several other questions that may matter more than the amount borrowed to cover transition costs.

Among those questions are:

Will benefits be reduced for people who choose not to participate in the private accounts?

How much are benefits going to be reduced for each age group participating in the private accounts?

How will survivor benefits be affected, especially for participants in the private account system who then die young?

Will the decision to participate in the private account system be irrevocable?

What investments will the government allow individuals to make in the private accounts?

What other decisions, such as asset allocation and rebalancing, will the government allow individuals to make and how often?

What will be the administrative costs of the private account system and who will pay such costs?

What limits, if any, will the government place on future increases in the administrative costs?

What remedies will the government allow to private account participants for misfeasance and malfeasance by the managers of the accounts?

What safety net will exist for participants in the private accounts who have catastrophic losses in their accounts after or near retirement age?

I am sure there are other questions as well, but I doubt that Bush will have answers to these questions that satisfy even his supporters.

[MasonJar]

10. Excuse me but this crew has already depleted the social security

trust fund. Remember the trifecta! Small wonder that it is low when the monsters have used it for their vile war. Maybe citizens did not originally put in at the current level, but if their money had stayed in place, compounding would have made up the difference. When the morons in charge talk about the deficit, they would be talking much greater numbers if they had not artificially upped the numbers with the social security trust fund which is supposed to be inviolate.

[snippy]

11. All of the money in the Social Security trust fund has been spent every

year since its inception. It has been spent on other programs by democrats and republicans alike, except during those years under Clinton when the government had a surplus. In those years some of the trust fund money was used to reduce the amount of the publicly held debt rather than on other programs.

[greenohio]

23. This is true. There never was a trust fund.

[VTHoosierPatriot]

52. So,,,

It wouldn't necessarily be inaccurate to say that Bush, through his tax cuts and war, hijacked social security leaving senior citizens to beg for money on street corners. Now, he's proposing that seniors leave their retirements in the hands of all the potential Enrons, Tycos, and Worldcoms of corporate america. Deep factual analysis never catch on in our sound bite obsessed media, and we need to take advantage of that more often.

[Straight Shooter]

45. "Gawd will provide."

That's the faith-based answer to your reality-based questions.

And even if Gawd doesn't provide, Jayzuss still loves you.

The Repubs have made a boogeyman out of the elderly who have built up this nation, and it's just like working for Enron: thanks for the memories, now kiss my ass and kiss your money good-bye.

[The Zanti Regent]

14. C'mon baby let the red ink flow

C'mon baby and lets spread the woe
C'mon baby let the red ink flow
flow all night long...

[Viva_La_Revolution]

15. Today on Pacifica(?) SS is OK till 2050

I was flipping stations, but the talk was.. no need to fix what's not broken. will pay 100% benefits till 2050. Didn't hear anything about the fund.

[winston61]

22. Thank the Cato institute

Where do you think all this crap about SS came from? Straight from the Cato Institute. And they got Lindsey Graham to punk for them. When I asked Graham's legislative asst. who wrote the legislation for Graham, she wouldn't answer me! It's just more bullshit being used to cover the transfer of wealth from the bottom to the top.

[shuffnew]

44. Cato=Saudi=Bush=GOP n/t

[NJCher]

35. I heard Nadler say the same thing

Was on either Pacifica or NPR. He said the idea that it's insolvent is promoted by the right to make it easier to change the system.


Cher

[shuffnew]

40. Yes, but they try to scare w/ this tactic -- they want that money!

YOu are sooo right. In fact, if they would leave it as-is and do something as simple as raising the limits or eradicating the limits on the soc. sec. contributions each year from workers and employers (50% each contributed), the system would be be in-place much past 2050 as it is now.

That is not the GOP plan though. They need to bankrupt it sooner to get the monies in their mittens and pay off their financial elite and then use the huge U.S. debt created by the GOP as their excuse to bankrupt the system. What better way to bankrupt the system quickly... than to privatize of course! It won't happen at the speed they need to complete their goals (20+ year GOP plan) w/o privatizing. This is just the next crucial step they need to the shut-down the social security system in my eyes and they are at the end of 20+ year GOP plan.

This is nothing new to their plan, but they have a higher sense of urgency to get this plan completed by 2006 timeframe if at all possible.

After all, if they should get a leader like Kerry in office, their plan completion would take big delays. It's do it while you think you can get by with it. Scare with their rhetoric and a media that is more than happy to propagate their deceit!

Yes, if it's not broke, don't fix (ruin) it! There are much simplier ways to get it solvent past 2050 and there is no urgency to bankrupt it immediately (but that is apparently in the GOP plan for years and we are into the final phases of their plan implementation attempts).

[neverforget]

16. Europe, Japan and China are asking us to get our budget under control

and these assclowns want to borrow another TRILLION! Welcome to the Banana Republic of the Debtor States!

[Just Me]

17. SEE?!?! These power-mongers ARE funnelling public wealth,...

,...into their pockets.

The most greed-laden are seriously, without conscience, prepared to spend our whole country in order to empower themselves.

Hello?

Do you hear that?

[alcuno]

19. BushCo has learned that outrage is dead in America.

Oh sure, we get worked up over minutia like Janet Jackson's breast, but as far as US policy is concerned, the American people will continue to put up with the robbing of the Treasury, the destruction of the environment, and a war without a plan.

They've learned to simply repeat their lies, never admit mistakes, and move forward with their plans.

[Timbuk3]

20. No Mandate for Market Fundamentalism

President Bush has claimed that the election provides a mandate for his regressive economic policies, but the evidence does not support this. Many who voted for him did so despite the President’s embrace of market fundamentalism — the extreme view that insists that markets should be left to regulate themselves. Most striking are the votes in Florida and Nevada to increase the statewide minimum wage. The measure passed in Florida with 71% of the vote and in Nevada with 68%. Even if one assumes that all Kerry voters favored this measure, at least 1 in 3 Bush voters agreed that government should assure that low wage workers get a raise.

These measures were put on the ballot precisely because the President’s Republican allies in the Congress have steadfastly blocked any effort to raise the Federal minimum wage since it was increased to $5.15 per hour in 1997. The market fundamentalists insist that the minimum wage should not be increased because markets always get prices right and government efforts to override market prices will inevitably destroy jobs. Precisely the same arguments were repeated by opponents of the initiatives in both Florida and Nevada. And in both states, overwhelming majorities rejected these misleading arguments. Supermajorities seem to understand that the labor market is shaped by rules and regulations and that society has a moral obligation to protect low wage workers from the superior bargaining power of giant corporations.

These votes are particularly relevant for the President’s stated intention to reshape Social Security. Market Fundamentalists have always opposed Social Security for reasons that have nothing to do with the system’s finances. Milton Friedman, the high priest of market fundamentalism argued in the New York Times (January 11, 1999) that social security should be replaced with a private and entirely voluntary system of retirement savings. Friedman and friends see Social Security as a wedge for an expanded government role in society. They saw a logical progression from Social Security, a system that protects the elderly from poverty, to Medicare, a system that is intended to protect the elderly from health care costs. And they worry that this logic will lead inevitably to government providing universal health insurance, as governments do in all other developed societies. Since that progression is their ultimate nightmare, they figure they can prevent by moving backwards. They want to dismantle Social Security and Medicare and return to a society in which the government does not protect anyone from either poverty or illness.

But Social Security has been one of the most successful government programs in U.S. history. Without it, as many as 33% of all of the elderly would live in poverty , and it has freed successive generations of middle aged people from the financial burden of supporting their elderly relatives. Most importantly, the program has allowed tens of millions of low wage workers — who were unable to acquire other retirement assets — to live out their lives with dignity. The success and popularity of the program makes it impossible for market fundamentalists to attack it frontally. They have chosen instead to use the classic technique of the Trojan Horse; their plan is to offer the voters a glittery gift that will later turn deadly.

More at: http://www.rockridgeinstitute.org/research/block/nomandate

[bhikkhu]

54. "one of the most successful government programs..."

Forgive my skepticism, but Social Security is a Ponzi scheme built on the premiss of a perpetual growth in the economy and the population. Like every Ponzi scheme, it appears to be amazingly successful, and then it crashes and burns. I don't expect to ever see a dime, myself.

[winston61]

21. the ultimate insult to working Americans

This is what they think they can get away with. Rob the taxpayers to foot the bill to transfer billions in Social Security contributions to private corporate control. And then have the gall to tell us they are doing us a favor. Don't piss on my leg and tell me it's raining.

[buddysmellgood]

24. Frame it: RED INK REPUBLICANS. From now on when you talk about

Republican economic policy, promise me you will refer to and repeatedly say RED INK REPUBLICANS.
Those RED INK REPUBLICANS are stealing my childrens's future.
A proposal by Bush's RED INK REPUBLICAN advisor...

Like that.

[Timbuk3]

25. I like it, too

"Red ink Republicans"

It's in my vocabulary, now.

[JPZenger]

26. Biggest Priority = Biggest GOP Contributors

The White House is now saying that the privatization of part of Social Security is the highest domestic priority. Guess who stands to gain the most from having the Federal Government take on $1 TRILLION in additional debt to make this system work? The answer: The big financial services companies such as Merrill Lynch that will run the new accounts.

Guess which executives of which companies were the largest contributors to Bush's re-election campaign. Answer: The big financial services companies.

[shuffnew]

41. Yep, pay back time for the financial groups "bought" votes(n/t/)

[ooglymoogly]

39. RED INK, SLAVE LABOR REPUBLICANS!!!!!!!!!!!!!!!!

[progressivejimNYC]

51. Red Ink Republicans

Another good name for them, which I read elsewhere:
Credit Card Conservatives

[psunitlions1]

63. WRONG!!!! Should be.... CHEAP LABOR REPUBLICANS

!

[Javaman]

27. What gets me is this...

Currently, the private debt load of the American pop is the highest in history. Basically, the average American can't manage their current debts or accounts. So, I don't know the exact details, but if this privatization of Social Security happens and the average in debt American is allowed to tape into it, rather than it being saved for retirement, I predict in about 30 years, we will have a nation of deeply indebt people dying at their desks trying to pay off the additional debt they have worked up via borrowing from SS.

[struggle4progress]

28. "SAve social security by bankrupting the federal government!"

A brave new economic idea brought to you by the Ownership Society.

[VolcanoJen]

31. Salon's "War Room" had a great take on this!

http://www.salon.com/politics/war_room//index.html

It's moments like these that leave us with only one simple question.

Be sure to click on the link... :D

[davhill]

33. In effect it is borrowing to make the rich richer

1. 6% of social security goes into privatization
2. The treasury borrows 1 Trillion to continue paying existing recipients
3. The 6% is invested mostly in the stock market
4. Stock prices rise because of the new demand
5. Existing stockholders benefit from the rise in prices

In effect we have borrowed the 1 Trillion to pay to existing stockholders, mostly the rich.

This is apart from any impact increasing the debt has on the economy or the dollar

[high density]

56. Exactly!

One trillion dollars dumped into the stock market, courtesy of the US Government.

How much more corrupt can these guys get?

[Rambis]

36. Get used to a little thing called "the impact fee"

If you are building a home etc there will be impact fees, there will be a sewer impact fee, electrical impact fee, environmental impact fee, and whatever else the pugs can come up with. Pick and endangered species in the area you will be building and you can bet there will be an impact fee for it. In Iowa they have sold their soul to the anti tax devil and the states pass the buck )or lack thereof) down to the locals who can't raise property taxes any more to get $. They have to do something in order to keep cutting taxes like they are. IDIOTS! I am not saying there shouldn't be environmental impact studies etc etc etc but this is a sham operation to cover up the fact they have cut taxes to the bone.

[Barkley]

37. Another reason to move to Canada - nt

[Megahurtz]

62. I love Canda

(I lived there for 3 years) but I'm afraid that so many Americans are going to go there that Canada immigration is going to make it more difficult.

[shuffnew]

38. There is a dupe link on this subject...

Apparently, I started a dupe link on this subject last nite (sorry). Some replies to the dupe post are at:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=90366&mesg_id=90366&page=

My Comment: This is an alarming situation that could adversely impact many Americans (especially boomers and those nearing the age 62 min. requirement - will they move the years out AGAIN on all those ready or near starting to draw monies they financially planned for and paid many many years into this system?)

The only way to immediately bankrupt the Soc. Sec. system is to do what they are proposing to do. Could this be potentially the end of a 20+ year GOP plan to bankrupt the system unless we get this stopped?!?!?!

[DFWJock]

43. Maybe...

We can turn over SS to Halliburton. Im sure they would bill us for whatever is fair.

[Massachusetts]

46. NO TAXATION WITHOUT REPRESENTATION

:mad: :mad: :mad:

[mdhunter]

47. Honestly, what the hell will 4% in a personal account really accomplish!?

[0007]

48. Who's gonna stop this madman from flushing us down the toilet?

I can't fucking believe this madness!

[Harlan James]

50. Bush Is A Pathological Borrower

So let's see if I have this straight - We need to add an additional 1 trillion dollars to the nat'l debt so that Bush can destroy Social Security?

Wow. What a deal.

[steely]

55. Next they'll be making it easier to pay our mortgages

with our credit cards.

<why does he make me curse so much?>

[texpatriot2004]

57. I think we need to take the credit away now. We are borrowing in

the "T's." It's time to stop. What's after the "T's?"

[shuffnew]

58. Krugman has good article on this Soc. Sec. Scam...

View Krugmans article and discussion on DU at:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x90487

[saving daylight]

59. krugman is not telling the truth

Krugman says himself that late in the next decade expenditures exceed revenues and we have to start calling in the notes from the "trust fund". When these notes get called, from say 2018 to 2052, taxes have to be raised to get the cash or we have larger deficits. It appears to me we either eat the 1 trillion dollar transition cost now over the next 10 years or we REALLY pay big time starting in 2018.

That is what his article says, but Klugman does not realize we are not all stupid enought to be BS's about it.

I waited 30 years for a chance to invest a portion of my own social security. Partial Privitization was an issue already as far back as 1975! Now I cannot, but at least maybe if we fight for it MY KIDS CAN!

All you youngsters here please learn: they never let me invest my money and if you do not do something, they will never let you either.

[Megahurtz]

60. Oh sure, "borrow" from

the poor and the middle class,(so to speak) but don't even bother borrowing from your wealthy corporate buddies.

[ProfessorGAC]

61. Oh. All Right Then

An idea with absolutely no theoretical merit will cost only a trillion dollars. Let's do it!

Look, if those extra dollars flow into the equity and capital markets, what will happen is that the extra capital will be attempting to buy only what's already there to buy. So, in the short term, people already owning those instruments will see a huge return (good for the brokers, the uber rich, and institutional holders), and then the entire market will be inflated, so that everyone holds $10,000 worth of stock that really is supported by only $6000 in owners' equity.

When the correction eventually occurs, all that money will return toward its true value and the "young kids" Bush cares about will take a MAJOR bath.

In the meantime, he's borrowing $1 trillion against those same kids' future, so there'll be price inflation and interest rate inflation. So, by the time these young workers hit 65, prices will be too high, interest rates too high, and their yield too low to live a comfortable lifestyle.

Unbrilliant.
The Professor

[nebraska007]

64. can this be right?

Talk about a secure investment... Put your money in the bonds that will be used to finance the additional trillion dollar debt that the government takes on by allowing this. Am I missing something, or is that essentially what this would be allowing?