News Conference on Bush Social Security Privatization Commission 

Statement by Linda Chavez-Thompson, Executive Vice President AFL-CIO News Conference on Bush Social Security Privatization Commission 

Social Security is critically important to all of America's working families. Its protections—guaranteed, lifelong benefits, full adjustments to guard against cost-of-living increases, increased benefits for families, greater income replacement for low-income workers, disability and survivor benefits—are the bricks and mortar of economic security in the United States. Through Social Security, all Americans work together to protect each other against risks that would be devastating if faced individually.

But President Bush is single-mindedly pursuing a plan to replace Social Security's guaranteed benefits with private investment accounts. He has made it clear that his agenda is to cut back on Social Security and to substitute private accounts invested in the stock market. 

The Bush Social Security Privatization Commission, meeting for the first time today, is merely a tool to advance the President's privatization plan. Unlike commissions appointed by previous presidents, this commission is not charged with studying options with an open mind and making recommendations to improve the lives of the American people. The Bush Social Security Commission is made up entirely of individuals who have already endorsed privatized individual accounts. It lacks even one representative of working families. And its charge is narrow: it is charged not with coming up with a plan to build upon Social Security's great success and protect the retirement security of America's working families for the future, but instead with developing a detailed plan to reduce Social Security's guaranteed benefits and substitute private stock accounts. 

President Bush has consistently avoided answering the hard questions. His commission must begin by answering the key question that comes with Social Security privatization: Whose benefits will be cut and by how much?
Privatization is an extraordinarily expensive proposition. There is no way around the costs of changing over from Social Security's guaranteed benefits to privatized individual accounts. The tab for privatization can be paid for in three ways use—the on-budget surplus, increase taxes, or cut benefits. The President has taken the first two options completely off the table with a millionaire tax cut that eliminates the budget surplus and a no-new-taxes promise. That leaves benefit cuts. 

So the big question for the commission is: Whose benefits get cut and by how much? Will they raise the retirement age, which is already going up to 67? Will they cut the systems inflation protections? Will they cut core benefit levels? Will they cut benefits for spouses, divorced spouses, children? Will they penalize people who do not work 35-year careers? The commission cannot fund private accounts without answering these questions.

If we take the Presidents principles at face value, we know he must cut benefits for workers under 55 by 40 percent, on average. And even under ideal circumstances, workers will see a large cut of 20 percent in their total benefits—counting the individual account. That says nothing of the cuts that will hit workers who are not fortunate enough to have full careers with steady earnings or were not lucky enough to live in a time when stock market returns were high. And this does not even begin to figure in the drastic hit to Social Securitys family benefits for wives and children.

The average retired worker gets just $845 a month from Social Security, today. For far too many people, that monthly benefit makes up all or most of their income in retirement. The commission needs to tell working families why they should and how they can do with less from Social Security.

This commission, and the President, must level with the American people. Whose benefits are you going to cut and by how much are you going to cut them to pay for your privatization agenda?