SAY YOU'RE expecting to rely on a modest retirement fund. Along comes a hotshot stockbroker promising that if he can handle your money, he'll guarantee you 15 or 40 percent less of a payout than you would have gotten in the first place. 

It sounds absurd--but that's the essence of George W. Bush's Social Security "reform." For all of Bush's hype about diverting a portion of the Social Security payroll tax into individual retirement accounts, his proposal is simply a smokescreen for a cut in benefits. 

The White House signaled as much in early January, when it began promoting a plan to calculate future Social benefits based on inflation rather than wages. That may appear to be fair--at first. If benefits climb along with prices, won't future retirees keep ahead of the curve? 

No. The current formula for benefits is calculated according to a percentage of wages earned over a workers' lifetime. Low-income workers receive benefits based on a higher percentage of their wages when they retire, helping them to avoid poverty. Better-paid workers, who often have other sources of retirement income, get benefits based on a smaller percentage of their wages. 

By using inflation rather than wages to calculate Social Security benefits, the Bush plan would exclude retirees from increases in overall standards of living based on wage increases. All told, say economists Dean Baker and David Rosnick, "A 15-year-old who is just entering the work force can expect a benefit cut of close to 40 percent"--nearly $160,000 in benefits in all. 

Not to worry, says the White House. Individual retirement accounts invested in the stock market will make up the difference--and workers will have the benefit of "ownership," too. 

Wrong on both counts. First, the White House assumptions of an ever-rising stock market is ridiculous, as a look at the burst of the Wall Street bubble in 2000 makes clear. 

"The stock market's historical returns (some 7 percent a year) are predicated on a hypothetical investor who bought an array of stocks in the past, reinvested all dividends, never cashed in, and never paid commissions or fees," the Black Chronicle newspaper noted in an editorial. "Well, that is not how investing works in the real world." 

In fact, real-world Wall Street is poised to siphon off billions in management fees to administer the new retirement accounts. Subtract that, wrote economist and New York Times columnist Paul Krugman, and a reasonable expectation of a return on such accounts is more like 4 percent. That's comparable to the low-risk Treasury bonds that Social Security trust funds hold today--only they won't come close to compensating for the proposed cuts in benefits.
 
Slashing benefits, of course, is Bush's real aim. And given that people won't really have access to the money in individual retirement accounts, they'd have the risks of playing the stock market without the chance to strike it rich. "These private accounts, then, are more what Business Week calls a 'values issue' than a fiscal one," admitted the conservative economist Irwin Stelzer, an adviser to right-wing media baron Rupert Murdoch. 

If working people reject the hype about personal accounts, the Bush crowd will sound the alarm--once again--about the "crisis" in Social Security. The message boils down to this: The system is on the brink of collapse because of the impending retirement of the baby boom generation, and if you don't do go along with privatization, you'll get nothing at all. 

In fact, Social Security, the most successful social program in U.S. history, is on strong footing. That's precisely because it isn't based on individual retirement accounts, but rather relies on workers to pay taxes to support today's retirees, with the expectation that those workers will receive similar support in the future. 
The system, which currently relies on the interest paid on treasury bills, can keep paying full benefits by cashing in bonds until at least 2052, according to the Congressional Budget Office. And while the White House claims that the current program will worsen the federal budget deficit, the Social Security system is actually in surplus right now. 

By contrast, Bush's plan would worsen the deficit by having the government borrow up to $2 trillion over the next decade to cover benefits for current retirees and those to come in the next few years. 

The simple truth is that Social Security benefits for soon-to-retire baby boomers could easily be paid, and even increased--by raising payroll taxes on high-income earners, who currently pay only on their first $87,900 of income each year. 

But higher taxes on the wealthy is dismissed out of hand by the White House and the compliant mainstream media. Instead, we're bombarded with crisis scenarios that assume historically low rates of economic growth. 

So Bush's advisers assume a weak and stagnant economy to predict doom for the current Social Security system--but promise an economic utopia of ever-rising stock values in order to sell the privatization scheme. 

This con job should be easy for the opposition in Congress to expose--if one existed. The highest-profile criticisms of Bush's plan so far have come from Republicans, not Democrats--who can't seem to fathom that their promises to "save" Social Security mean they will actually have to fight back. Instead, prominent Democrats are looking for ways to "improve" Bush's proposed legislation--like they did with Bush's disastrous No Child Left Behind and Medicare "reform" bills. 

Social Security is an issue that can galvanize mass opposition to Bush. It's time to get organized.