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Rep. Jim McDermott

Rep. Jim McDermott

Posted: October 28, 2010 12:28 PM

So You Want to Privatize

What's Your Reaction:

Last week, former President George W. Bush emerged from his Texas mansion to declare that the biggest failure of his presidency was not privatizing Social Security. President Bush should take a good look around because he failed at a number of things, but failing to gut one of America's most effective programs was, in fact, a huge success for the American people. Nevertheless, Bush's dream of putting our retirement benefits into the reckless hands of Wall Street hasn't died, and Republicans have made it clear that privatizing Social Security and Medicare is among their top priorities.

Republicans aren't resurrecting Bush's plan verbatim; instead, they've dressed up Bush's privatization policies in new clothing, hoping the American people simply won't notice. If Republicans take control of the House next week, self-described Republican "young gun" Paul Ryan of Wisconsin is poised to take over the Budget Committee in the next Congress. Ryan recently made his plan for privatization evident when he released his "Roadmap for America's Future," which, among other senseless policies, includes plans to privatize Social Security and to turn Medicare into a voucher system in which seniors would be forced to fend for themselves on the private insurance market. The vouchers wouldn't keep pace with health-care costs, leaving millions of older Americans vulnerable to having no health coverage at all. Yet, despite its dismantling of America's most fundamental safety net, nearly 80 percent of House Republicans voted in favor of Ryan's Medicare plan. Republicans may not be campaigning on privatizing these popular programs, but it's clear they're committed to restarting the failed efforts of the Bush administration to destroy them.

Following Ryan's "Roadmap" is bound to lead Americans down the road to insecurity, anxiety, and possibly financial ruin. The American people have become like the voice in a GPS system, repeatedly telling Republicans to make a U-turn when it comes to privatization, but Republicans have pushed the mute button on the public's wishes and are speeding ahead. Imagine what seniors would be facing today if Bush had succeeded in privatizing Social Security. So many Americans have watched as the value of their private retirement accounts have been decimated by the whims of Wall Street. What would happen if their Social Security benefits were vulnerable to the same recklessness and chicanery? What would that mean for the millions who are scraping to get by, worrying about how to put food on the table, or perhaps facing foreclosure on their home? Americans who rely on their Social Security benefits can't wait for the markets to slowly rebound; for them, the retirement they worked so hard to achieve would turn into nothing more than an illusion.

For 75 years, Social Security has been one our country's greatest successes. Not only has it kept millions of seniors and children out of poverty, but no matter which way the market winds blow, no one loses a penny of their guaranteed benefits -- benefits that older Americans have earned over a lifetime of hard work and dedication. Medicare, too, has protected seniors from the financial terror of medical crisis for more than 50 years, but Republicans insist that profit-driven insurance companies will be better keepers of America's promise to care for its elders. These are the same insurance companies that until recently were charging a woman higher premiums simply because she is a woman, refusing to cover children with asthma, and dropping cancer patients' coverage because the cancer victims were not a profitable investment.

Americans face a choice as they head to the polls next Tuesday, and that choice is crystal clear: Democrats have worked tirelessly and fruitfully to bring our country back from the brink of financial ruin and to protect these most critical programs. We've made great strides in fixing our broken health care system, we've strengthened Medicare by extending its solvency for 12 years, and we're phasing out the Medicare prescription drug "donut hole." The Republicans want to drag us backward, endangering older Americans and giving still more power to the Wall Street brokers who brought us to the brink of collapse. Voters need to ask themselves if they want a Congress that will put Wall Street and insurance companies in charge of America's safety net, or do they want a Congress that, time and time again, has stood up for the working people, the children, and the elders of America?

 

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HUFFPOST SUPER USER
Spartucus
08:50 PM on 10/28/2010
Dear Rep McDermott... please explain to me why the Democrats just appointed Bob Reischauer to the SS Board? He is a known pro-SS privatizer and a member of the board on an organization owned by Peter Peterson the "King of SS Privatization". last week on the "Last Word' I watched three white wealthy Dems, Lawrence O'Donnell, ex-Senator Bill Bradley and ex-Senator Gary Hart explain to each other why SS, Medicare and Medicaid had to be cut so that they and other wealthy folks would not have to face higher marginal tax rates and higher capital gains taxes. Supposedly these programs were the reason we were going bankrupt in the short term and the long term. I didn't hear a word about how the the Bush tax cuts or our unnecessary and illegal wars or the 1 trillion wasted in defense spending annually might have something to do with our budget deficit. Furthermore, these so-called Dems used the same Repug talking point lies, half-truths and distortions that I have heard over and over again from the Republicans. They know that SS and Medicare are stand alone programs and not part of the general budget and that even w/o a fix SS is 100% through 2036 and Medicare and Medicaid are in trouble because our entire healthcare system is fiscally unsustainable at double the cost per capita of all other industrialized countries. At least the Republicans are honest about wanting to destroy SS!
06:52 PM on 10/28/2010
OK Jim, it's time to be real and not be in campaign mode . . . we all know SS has serious flaws as well as Medicare and the programs as is won't make it for a person like me who is under 35 . . .

1. What is your solution to fix these programs so they are sustainable?

2. My vote on Tuesday will have nothing to do with SS because regardless who wins, we aren't privitizing SS in the next 2 years, 4 years or even 8 years so don't try and tell us that is what is on the line.
HUFFPOST SUPER USER
edgarcaycedoc
06:16 PM on 10/28/2010
I definitely oppose making Social Security funds grist for Wall Street's continuing bacchanal of mismanaging funds of investors. They make money. Everybody else loses. NO WAY!
06:53 PM on 10/28/2010
How about allowing someone to opt out of SS?

Being under 30, I'd love the opportunity to opt out right now, it may not be for everyone but why not allow the option?
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HUFFPOST SUPER USER
Spartucus
08:51 PM on 10/28/2010
Fine..you get to opt out of SS and I get to opt out of financing illegal wars and a bloated war machine!
05:12 PM on 10/28/2010
Another politician blowing hot air. Did Rep McDermett ever read the Ryan proposal? I will be charitable and say probably not, as he would have flunked reading comprehension if he had and then made such untrue claims about the proposal.

You would not have to sign up for a private account, and if you did you could not lose your original contribution. So all the talk about "decimation", "whims of Wall Street", "food on the table", or "facing foreclosure on their home." is so much hogwash.

http://house.gov/budget_republicans/press/2007/042710ryanbillletterfinal.pdf page 2 describes voluntary personal savings accounts (PSA) created from a portion of payroll taxes guaranteed to be as large as contributions adjusted for the CPI-W.

http://articles.chicagotribune.com/2010-10-21/news/ct-met-bush-visit-20101021_1_decision-points-book-plastic-bag was the original Bush article, by the way.
04:20 PM on 10/28/2010
Sir, if social security is so great, why are you and the members of Congress in a different system?
05:01 PM on 10/28/2010
Because they are rich, SS was designed to keep poor seniors from complete poverty. 2nd, they make much more money with their system. So they'll never have to worry about poverty.
04:48 PM on 10/31/2010
If Wall Street and 401ks are so great why do members of Congress put their retirement money in a tsp and Barclays service them.
04:12 PM on 10/28/2010
I want social security to be privatized. I will not collect anything from it because the politicians keep raiding the Treasury. Rep. McDermott, you may want to work with the Republicans to fix this broken system.

I want out.
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HUFFPOST SUPER USER
jubo
Celestianish
07:39 PM on 10/28/2010
Do you really think privatization and 'politicians raiding' are that different?

The former is but a circumvolution of the latter...
08:20 PM on 10/28/2010
Just curious...how did your personal investments come out over the last 3 years? I had a moderate, not aggressive broad asset allocation in low cost index funds and still am under water by ~ 6%. I personally am looking forward to SS (which I have been paying into for 44 years) to provide at least part of 1 leg of the 3-4 legged retirement stool!
02:15 PM on 10/28/2010
Most of the arguments for privatization comes from people who say they want this because it sounds "cool"

They have little if any substance to the argument and if challenged, they scream and yell in hopes of scaring others from forcing an actual conversation
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HUFFPOST SUPER USER
Spartucus
09:00 PM on 10/28/2010
There are dozens of books available explaining how Wall Street is rigged against the average investor. Given the fact professional fund managers have lost their shirts on Wall Street I and given that wages are continuing to decline I don't see how many regular people are going to insure their retirement through personal investing. Furthermore, given that less than 7% of working Americans are covered by old fashioned pensions and that the majority of people with 401K's have less than 20K in these fee sucking programs it is pretty clear to me the majority of people in this country will coninue to depend on SS to survive when retired. Instead of settling for SS that only covers 40% of our wages we should demonstrating for the program to be cover 60% of our wages and for the program to be put into the lock box Gore was laughed at for talking about during his presidential campaign.
01:42 PM on 10/28/2010
.
the term Social Security refers to the federalOld-Age, Survivors, and Disability Insurance (OASDI) program.

In particular, note that it is an INSURANCE program, not an INVESTMENT program.

Social Security was never intended to be an investment program.
INVESTMENT implies potential losses as well as potential gains,
and does not provide for losses except by use of exotic derivatives investment
loss insurances such as have resulted in the current economic disaster.
In the event of losses on the scale that is possible, bailout of such
derivatives would not be feasible.. Think AIG without GS saving them
as a conduit for bilking the US out of money from their bailout.

INSURANCE does not contemplate losses.-
what is required is to maintain solvency of the system

Unlike Bush's belief in the fairy tale of kissing a frog and making it a prince,
an INSURANCE program can not be directly converted to an INVESTMENT program.

If Congress and the taxpayers feel the need to develop a private investment program
other than 401(k) etc. then it should be considered
as an entirely new and separate issue from Social Security INSURANCE.
.
04:49 PM on 10/28/2010
OASDI is NOT insurance! It's the world's largest Ponzi Scheme and has been since its inception.
08:20 PM on 10/28/2010
.
perhaps you might consider checking into the actuarial facts of Social Security.
.
08:07 PM on 10/28/2010
Conservatives seem not to understand the concept of a "Social Safety Net". It's a system that is solid and dependable even when the market is going haywire.
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HUFFPOST COMMUNITY MODERATOR
tacevad
American SS Card Carrying Socialist
12:46 PM on 10/28/2010
Privatization adds middlemen for profit ,increasing administrative costs.
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Decorina
Hypocrisy means your karma ran over your dogma
04:09 PM on 10/28/2010
And further lines of the pockets at the public's expense. Privatize the profits and socialize the losses. Go Re.hugs.