There's an old saying: When a man in a fancy suit starts to tell you how he's got a great idea to help you make a lot of money, walk away, and hold on to your wallet.
Well, President George Bush, fresh from his tainted election win, and the gang in Congress where Republicans picked up seats in both houses, all of whom wear fancy suits, are coming at us now with a scheme they claim will help us "save" our Social Security benefits, and even make our pensions a whole lot bigger.
The scheme, however, is really a scam.
For some years now, with the help of some conservative Democrats (like the late and unmourned Sen. Daniel Patrick Moynihan) or the still semi-quick Sen. Joe Lieberman) who have been in on the con, they have been working to scare us into believing that Social Security is in trouble, and that it might not even be there for younger workers when they retire. They've also tried to tell us that it is making a pitiful rate of return on our "investment" and that we could do much better if we could take that money that the government has been pulling out of our paychecks each month, and invest it ourselves in the stock market (a claim that sounded better back in the '90s when the market doubled, but that doesn't resonate much these days).
Let's first look at the premise. Is Social Security really in trouble?
The answer is no. Assuming no changes were made, it's funded right now right clear through 2043, a distant year when kids not yet born will be watching their own kids going off to college!), and even after that, it will have huge assets that can be counted on to cover over 75 percent of the demand that will be placed on the system by retiring Baby Boomers (like myself).
Would there be a shortfall in the fund after 2043 if no steps were taken to bolster it? Sure. But then you have to ask, what would need to be done to fully cover that Baby Boom wave of retirees? The answer is, all you would have to do is lift the ceiling on income that is subject to Social Security taxation. Right now there's a ceiling of $83,000. Earn more than that, and there's no Social Security tax taken on the additional earnings. In other words, the rich don't have to pay as much, percentage-wise, into the fund as the rest of us. It's the opposite of a progressive tax. It's downright regressive. Now you might not want to pay 7.5 percent tax on that extra $17,000 you'd be making if you got a raise to $100,000 a year, but remember, your employer is also paying that extra money into your account, so you're really making money. What's the beef? (Of course, if you were making $100,000, you'd probably be a Republican, and probably wouldn't be reading this column anyhow.)
Besides, there are other ways to fix things up through tinkering. If the government just changed the formula, and had employers pay an extra 1 percent tax into employees' accounts, the problem would be solved too--and at no cost to us, just to corporate shareholders who'd be seeing smaller profits.
Now the Bush guys who are running the show these days in Washington don't like these ideas. They don't want to see businesses and the rich--the people Bush so tellingly called his "base" in Michael Moore's "Fahrenheit 911"--getting socked with higher payroll taxes. In fact, what he and his gang of con artists want to do is use this fake scandal to get rid of Social Security taxes. How to do that? Just wreck Social Security, a program that has been protecting the nation's elderly and the disabled since the dawn of the New Deal in the 1930s and that has been on the GOP hitlist since it's inception.
To accomplish that, all they have to do is start getting people to opt out of the system. And that's what this Bush "reform" plan is all about. Divide and conquer. They're proposing that the younger workers--people under 50 who are still relatively far from retirement and who just see Social Security as a deduction from their paychecks--get an option to take some of that money and, instead of having it sent to the Social Security Administration for payment to current retirees (their parents actually), invest it themselves in something like the stock market.
That might sound attractive if haven't read the financial pages, or have only lived during a time when the stock market has risen, but have you noticed that lately the market has mostly just gone sideways? And sometimes it's even gone significantly south.
What they also neglect to mention is that if you invest that money, some broker is going to be collecting a hefty fee to do your buying and selling. The Social Security Administration doesn't do that.
They also don't mention to you that your benefits under Social Security aren't determined by how well the SSA invests your money--they are set by Congress based upon the amount you put in over your lifetime of work. That's a very solid "investment"--one that you don't have to worry about. And it's there for you even if you've just worked 10 years and then have a disabling injury or disease--something you can't say about a private investment fund.
If you really want to know why you should be suspicious about this "reform" that's being touted for our Social Security, ask yourself this: When is the last time that Republicans did something good for poor people on their own initiative, without being forced to?
And ask yourself this too: What other problem facing this nation over the course of its 228-year history was addressed by any government, Republican or Democrat, 38 years in advance?
If you answered "never" to the first question and "none" to the second, you should be highly suspicious about this new campaign to allegedly "save" Social Security on your behalf.
For the rest of this column, please go (at no charge) to This Can't Be Happening! .