Wall St. and Business Wednesdays: Bush’s Social Security Privatization ‘Adversely Affects’ Blacks by Askia Muhammad
When President George Bush and his supporters offered a rosy economic scenario for this country’s retirees in a future “ownership” society at a two-day economic conference Dec. 15-16, he was really peddling a “hoax” that will, in fact, betray Social Security, the nation’s most fundamental social contract since the Bill of Rights.
His scheme to partially privatize the retirement accounts of younger workers today will not “fix the system,” as Mr. Bush promised, but will jeopardize Social Security’s protection, which accounts for more than 90 percent of the retirement income for half of all Blacks over 65 today and 100 percent of the income for 40 percent of them. If enacted, privatization would more than double the number of Black retirees living below the poverty level, insists Congressional Black Caucus members and other experts.
“I think it will be healthy for our system to own and manage their own retirement account(s),” Mr. Bush told conferees at the Ronald Reagan International Trade Center Dec. 16. “It will cause them to have a vital stake in public policy. People will ask more questions about fiscal responsibility than ever before. People will want to carefully watch decisions made by government at all levels if they have a vital stake in watching their portfolio grow.”
Democrats, especially Black Democrats, strongly disagree.
“I, and many other Democrats, believe that the administration’s plan to privatize Social Security by establishing private accounts will be detrimental to the nest-egg that many Americans, particularly minorities, depend on in their retirement,” Rep. Stephanie Tubbs-Jones (D-Ohio), a member of House Ways and Means Committee’s Subcommittee on Social Security, told reporters during a Dec. 15 conference call. “We want him as well as all Americans to understand that his plan for privatizing Social Security would adversely affect the minority population of this country.”
She stressed that Social Security was never intended to be an individual retirement account.
“It was intended to be just what it said: a social security, a social program to provide benefits to those most in need, and to provide benefits to older people at a time when they most need it,” she explained. “For us to now change that program from a social program to an individual account makes no sense at all.”
While the President’s plan “may seem innocuous on its face, the reality is that privatization is a duplicitous attempt to renege on our country’s promise to provide reliable support to aging retirees, disabled workers, and orphaned dependents,” wrote Dr. Maya Rockeymoore, vice president of Research and Programs at the Congressional Black Caucus Foundation, in an article for Black Commentator.com.
Historically, Black men and women worked all their lives—when they could get work that is—at the hardest jobs for the lowest pay. Because of historical patterns of discrimination in the U.S. education system and labor market, Black workers are more likely to have experienced spells of unemployment or underemployment, and are more likely to retire with less income from private pensions, assets or personal savings, according to Dr. Rockeymoore.
In addition, the disproportionate lack of access to quality, affordable health care contributes to Black higher rates of disability and early death. These factors contribute to higher proportions of Blacks receiving disability and survivor benefits than those receiving retirement benefits.
Up until now, Social Security has provided an equalizing effect through the provision of a steady monthly check for retirees, for those who become disabled, and for the dependent children and spouse of a worker who has died in the prime of his or her life.
Almost 80 percent of Blacks 65 years or older depend on their monthly Social Security checks. Without those benefits, they would fall below the poverty level. In fact, the Bush privatization plan would increase those numbers of Black seniors living in poverty from 23.9 percent to 58.2 percent, said Rep. Tubbs-Jones.
“This is a dramatic change in the American social contract, to talk about privatizing Social Security,” Dr. William Spriggs, Senior Fellow at the Economic Policy Institute, said in the Dec. 15 conference call with reporters. “What’s being privatized is the risk, and that’s very important for people to recognize. (Social Security) is a social insurance. We are taking everybody and putting them in the risk pool, because one of three things will happen to you as a worker: You might become disabled, you might die and, if God is willing, you’ll live a long life and you won’t have to worry about retirement.”
He further explained, “When we privatize the program, we privatize the risk. We take the program apart. (The President’s 2003 Social Security) commission recognized that, to privatize the retirement program requires: changing the mission; changing the focus; and taking the program apart, truly separating them. African Americans disproportionately end up in the disability and survivor benefit categories. But since the benefit formula is the same to the family of those who become disabled or those who get survivor’s benefits, the benefit is the same.”
By and large, Blacks have been benefited from Social Security, so now “reforms” are being put forward that will begin to dismantle it to the detriment of all of the masses, Dr. Spriggs charged. “The Social Security fight is really more of a class fight. Those of us in the bottom 80 percent stand to lose. Those in the top 20 percent will gain,” he maintained.
There is some “shady math going on,” opined Rep. Tubbs-Jones. “This is a gimmick in progress. We really need to bring to the mic the problems that are being faced with these programs.
“A recent study by the Center on Budget and Policy Priorities stated that recent plans to replace part of Social Security with individual accounts would significantly increase federal borrowing for at least several decades. Over the next 10 years alone, it would increase deficits and borrowing by, between $1 trillion and $5.3 trillion.”
The Black general public must remain alert, Dr. Spriggs warned. “We are starting to listen to the other side. We must broaden their definition of public morality and hold them accountable, instead of voting against our own interests because we were listening to someone else’s sense of morality.”
This editorial appears in The Final Call
© Copyright 2005 FCN Publishing, FinalCall.com
Wednesday, January 5, 2005