In a speech on the floor of the U.S. Senate, Senator Patty Murray today outlined her concerns about the massive new debt President Bush’s Social Security plan will heap on future generations. According to the Center on Budget and Policy Priorities, the President’s privatization plan will add nearly $5 trillion in debt to our country’s balance sheet.
Senator Murray’s full remarks follow:
I’m very concerned that President Bush’s proposed Social Security “restructuring” will imperil the security of all Americans – from young workers retiring in decades to seniors retiring today.
- His plan will end the guaranteed benefit.
- It will do nothing to fix the long-term issues the system faces.
- And it adds trillions of dollars to our national debt.
In traveling the country to sell his privatization plan, President Bush has been saying:
“We have an obligation and a duty to confront problems and not pass them on to future generations.”
Many of us – on both sides of the aisle — agree with him. We should not create new problems for the next generation to handle. Trouble is, the president’s plan actually adds to the problems of the next generation – it does nothing to solve them.
But it’s time for President Bush to level with the American people on what his program really is – a new recipe for a continuing fall into a black hole of debt. This plan will run up $5 trillion in debt that our generation won’t pay for. It will fall squarely on the shoulders of our children and grandchildren.
The President not only wants to gamble away the secure future retirees count on, he wants to burden them with a huge new 5 trillion dollar debt.
There’s another point worth making about the President’s plan as well. He claims it won’t affect anyone over 55, but let’s be clear — they’ll face these huge deficits as well. President Bush may say that he won’t cut your benefits, but how can he guarantee that if he plans to steal trillions from the social security trust fund. This president’s plan simply adds to our problems.
All you have to do to understand the situation is look at the record.
Last week we received a budget with the biggest deficit in our nation’s history – four short years after the budget had the largest surplus in history.
Days later we say cost estimates for his Medicare Prescription Drug benefit balloon from 400 Billion dollars to more than 700 Billion dollars.
Now the Bush Administration plans to add trillions to our balance sheet by privatizing Social Security.
As this chart shows, there’s more red ink in the president’s budget than we care to see. But unfortunately, if his privatization plan goes into effect, massive new debt increases are added in the years after the plan takes effect. The president, as he did with Medicare, likes to talk about costs of implementation over ten year periods. What he doesn’t mention is that for five years under those projections, the plan isn’t fully phased in. So rather than considering his already bloated 700 billion dollar transition projection, let’s look at an outside source.
The Center on Budget and Policy Priorities says the borrowing numbers we’ve heard from the Administration “are misleadingly low.”
They are generated by using a ten-year budget window (2006- 2015) that includes only five years of the fully phased-in plan. The plan would not be launched until 2009 and not be in full effect until 2011.
Over the first ten years that the plan actually was in effect (2009-18), it would add about $1.4 trillion to the debt. Over the next ten years (2019- 28), it would add about $3.5 trillion more to the debt. All told, the plan would add $4.9 trillion (14 percent of GDP in 2028) to the debt over its first 20 years.
That money is going to have to come from somewhere, and it’s naïve to think that huge new borrowing won’t affect current retirees. It’s naïve to think massive new borrowing won’t affect programs like Medicare and Medicaid that need our attention. And it’s naïve to think we’ll simply go along and pass on this massive new problem to our children and grandchildren.
A recent story on the front page the Washington Post was headlined: “After Bush Leaves Office, His Budget’s Costs Balloon.” I’d like to read just a few lines from that story. It warned, for instance, that “the numbers released in recent days add up to a budgetary landmine that could blow up just as the next president moves into the Oval Office.”
Philip G. Joyce, a professor of public policy at George Washington University, said in the piece: “It’s almost like you’ve got a budget, and you’ve got a shadow budget coming in behind that’s a whole lot more expensive.”
And a Republican advisor to one of our colleagues said: “Hopefully some very difficult decisions will be addressed between now and the time we have a new White House resident so that occupant isn’t faced with some very expensive chickens coming home to roost. There are some things that we can do, but unfortunately in the political world kicking down the road is often seen as leadership.” I think that says it all.
But this huge new debt isn’t the only bad part of privatization. In fact, this plan does nothing to extend Social Security solvency – not for a year, not for one day, not even for one hour. That’s the issue we’re trying to solve, and the President’s plan – at least the part he’s been willing to share with us – doesn’t even address it. It’s an ideological gamble that we in the Senate, and those who depend on Social Security around the country, will not stand for.
Rather than gambling away our security and running up a huge new debt, we should promote personal savings to help every American with their retirement. And we should stop raiding the Social Security trust fund to pay for misguided priorities like massive tax cuts for the wealthy.
The ideas we’ve heard from the President are too dangerous for this generation of retirees and those to follow.
Mr. President, as you may imagine, my office has received lots of mail on this proposal. I’ve heard from current retirees, disabled workers, and the young people who this plan will supposedly benefit the most. But I think President Bush would be surprised by the comments I’ve been getting. I’d like to read just a small sampling of those comments here today.
From a retiree on Whidbey Island – “The administration should be ashamed of its effort to confuse and mislead the hard-working citizens of the US.
From “a twenty-something who is supposedly going to benefit from privatization” – “I want Social Security to be left in its current form.”
And finally, from a 51-year-old self-employed fisherman – “My main concern about Social Security is that it survive for my children. The risks are simply too great for the future of our citizens and our country.
The president’s plan is for Social In-Security – a guaranteed gamble, not a guaranteed benefit. We will continue to stand up for future generations against a private solution that simply adds trillions in debt to our future generations. We’re going to be proud of what we pass along to our children and grandchildren.
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