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Battle Over Social Security Gets Hot But White House
Not Talking
White House not denying report benefits will be
reduced, AARP launches campaign against privatization
Jan. 4, 2005 The battle of making changes to the
Social Security program heated up tremendously today with a report by
the Associated Press saying The White House is refusing to confirm or
deny a report President George W. Bush may recommend a plan to cut
Social Security benefits. AARP also launched a major campaign today to
stop privatization of the system.
Yesterday, The Washington Post reported the
administration has told top Republicans it wants to change the way
retirement benefits are calculated, which would lower payments. The
newspaper said the formula change would reduce payments by small
amounts in the early years -- and by more than half for those retiring
in 2075.
Under the proposal, according to The Post, the
first-year benefits for retirees would be calculated using inflation
rates rather than the rise in wages over a worker's lifetime. Because
wages tend to rise considerably faster than inflation, the new formula
would stunt the growth of benefits.
(link to story by The Post, requires registration -
Social Security Formula Weighed)
Press Secretary Scott McClellan told the AP the
president hasn't made any decisions.
Bush has vowed not to cut benefits for those "at or
near retirement." But McClellan refused to define what that means for
the AP.
"The Bush Administration has finally acknowledged
that the centerpiece of its plan to radically overhaul Social Security
is a benefit cut of more than 40 percent in the coming decades for every
American senior, said House Democratic Leader Nancy Pelosi today. This
is the equivalent of forcing seniors today to live at a 1940s standard
of living. And, according to Republicans, nothing else is seriously on
the table.
Republicans keep saying that Social Security won't be there for today's
workers -- and if they get their way, they'll be right. The Republican
proposals put forth so far do not make Social Security stronger. They
make it weaker.
"American workers have paid into Social Security
for years and deserve to receive their full benefits. Rather than
cutting benefits, we should be fighting to protect the only secure
source of retirement funding that American workers have."
Also, today, the AARP launched a massive campaign
trying to keep insecurity out of Social Security.
AARP says they are reminding members of Congress
and the public about the risks of carving out private accounts from
Social Security which millions of older Americans rely on as their only
source for guaranteed retirement income.
In full-page advertisements that will begin running
in over 59 newspapers on Tuesday, January 4th, AARP warns that turning
Social Security into a program where benefits are based on private
investments poses serious risks. "Winners and losers are stock market
terms. Do you really want them to become retirement terms?" one ad asks.
"We must not forget that Social Security is the
only guaranteed source of income that a majority of workers have for
their retirement. AARP will not agree to jeopardize peoples Social
Security benefits," said AARP President Marie Smith.
"Americans are saving too little, whether on their
own or through plans such as 401(k)s. Workers will need Social Security
for its guaranteed lifelong benefits when they retire," she added.
AARP CEO Bill Novelli said, "There are right ways
and wrong ways to strengthen Social Security. Passing on several
trillion dollars in additional federal debt to future generations as a
result of diverting money away from Social Security to fund private
accounts is the wrong way."
"We are not advocating for the status quo," Novelli
explained. "We need to make a series of modest changes sooner rather
than later to strengthen the program for future generations. But
siphoning funds out of Social Security to finance private accounts could
make the programs financial outlook worse."
Another AARP ad depicts a man and woman in their
early forties who say, "If we feel like gambling, well play the
slots
there are places in retirement planning for risk. Social Security
is not one of them."
The ads, developed for AARP by GSD&M, will run
January 4-16 in 53 daily newspapers and six publications influential to
lawmakers on Capitol Hill. In addition, AARP members will be calling
their representatives in Washington to let them know that they oppose
plans that take money out of the Social Security trust fund to finance
private accounts.
AARP Social Security Action Center -
http://www.aarp.org/socialsecurity/Articles/a2005-01-03-ssinsecurity.html
In his speech to the new 109th Congress,
the President briefly mentioned Social Securtiy, saying,
I look
forward to working with you to make the Social Security system work for
future generations. I know you've heard a lot of discussions about
Social Security. I ask you to keep an open mind as we move forward to
make sure the system works. Seniors have nothing to fear when they hear
talk about reforming the Social Security system. Every senior in America
will get their check. And the fundamental question is do we have the
will necessary to make sure the Social Security system is sound and
available for future generations of Americans, for younger generations
of Americans. I'm going to call upon Congress to take this issue on, and
I look forward to working with you to modernize the system.
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