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Senator Murray Floor Speech on the First Introduced Republican Social Security Privatization Plan

Mar 09 2005

Murray: First Legislative Proposal Fails Basic Reform Tests

(WASHINGTON, DC) – Senator Patty Murray today called the first officially introduced Republican plan to privatize Social Security a risky scheme that would add trillions to the national debt and unfairly slash benefits for women. On the floor of the U.S. Senate, Murray reiterated her plan to stand up for current and future retirees by ensuring that Republicans aren't able to deconstruct America's social insurance program.

Murray's full remarks follow:

We've heard a lot of talk on this floor, on TV talk shows and all around the country in recent weeks on Social Security. We've heard about a supposed "crisis" in the program, that it will be flat busted or broke. We've heard about the President's view that this social insurance program must be radically restructured. And we've heard that privatizing Social Security is the only way to go.

Now, we hear that the President is embarking on a 60-day, 60-stop campaign tour in an effort to sell his privatization plan to the American people. But Mr. President, the American people aren't buying this risky privatization scheme.

From the day this debate began, I've consistently said that any proposal put forward to address Social Security must meet a few basic standards.

It must:

  • Preserve Social Security's guaranteed benefit

  • Preserve Social Security's protections for workers when they are disabled

  • Protect against benefit reductions for women, minorities and all others

  • Protect our budget from ever growing deficits

This week we in the Senate saw the first bill that purports to reform Social Security introduced in this body. But unfortunately, this first legislative proposal fails my simple test in a few not-so-simple ways.

Guaranteed Benefit

First, preservation of the guaranteed benefit must be our top priority. The bedrock of Social Security is the guaranteed benefit, and the President's plan calls for cutting benefits by one-third or more. That's a huge hit to every retiree who depends on the system.

Like Bush’s plan, this new Senate bill will slash benefits. The plan has a further 7% reduction in benefits for early retirees -- relative to current law -- that is phased in between 2024 and 2028. In conjunction with the two pieces of the plan that raise the retirement age, the proposal would reduce benefits for those retiring at age 62 by 40% by the year 2026, by 50% by the year 2054 and by 56% by the year 2080.

The deconstruction of the guaranteed benefit leads us further and further away from the real security this program provides. And this country needs to know that even though Republicans don't like to campaign on it, their plans would be the end to the guaranteed benefit.

Impact on Women

Mr. President, a few weeks ago I joined several of my female colleagues to speak on this floor about how the President's plan would impact women. Unfortunately, this is not a new battle. For years, we've fought together to ensure that women and minorities receive a fair shake from Social Security reform discussions.

The promise of Social Security is especially important to women because women face unique challenges in retirement. We know that women make less money than men, women leave the workforce to raise families, and women live longer -- and are more likely to suffer from a chronic health condition.

Even with those special challenges, Social Security keeps millions of older women out of poverty. Its benefit formulas are tilted to give a greater rate of return for lower wage workers like women and minorities.

Unfortunately, time and time again, we've found that proposals new proposals will impoverish women and slash their benefits. This new plan is no exception. This plan would cut benefits based on a new life expectancy requirement. The Senate Republican plan says, and I quote, "By factoring increased life expectancy into the base benefit calculation, the rate of increase in benefit payments will be slowed."

Addressing the long-term solvency of Social Security is a laudable goal – but trying to balance the books by slashing benefits for women is absolutely unacceptable. This plan would dismantle the progressive nature of Social Security benefits, leaving women with less money over a longer period of time.

It makes no sense to reduce women's benefits – already limited by their lower income – by cutting them again simply because they live longer. In fact, we should be doing all we can to ensure progressive benefits for low earners that is targeted to those least likely to have other retirement savings. All too often, that means women.

I won't stand for this Republican attack on women, and I know many of my colleagues will stand right along side me in this fight.

New Debt

Finally, there's another most important issue that no one on the other side of the aisle or the other end of Pennsylvania Avenue cares to address. These Social Security plans would add trillions of dollars to an already massive federal debt – a debt that our generation will hand over to the next.

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.

This new Republican plan, just like President Bush's, would add trillions of dollars in debt to our country's financial sheets in the next two decades alone. The Center on Budget and Policy Priorities says that the privatization proposal will create nearly $5 trillion in new debt over 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.

So once again, we're left to consider privatization plans that run up massive new debt on the country's credit card while pulling money from the Social Security system and ending the bedrock of the program – the guaranteed benefit. That's a recipe for disaster.

The President and his friends in the Senate seem fixated on private accounts, even though they will do nothing at all to address the long-term solvency of the program. Last week, I joined with 41 of my colleagues to ask President Bush to take this risky scheme off the table before moving forward with any Social Security reform. The letter said, in part:

"Funding privatized accounts with Social Security dollars would not only make the program’s long term problems worse, but many believe it represents a first step toward undermining the program’s fundamental goals. Therefore, so long as this proposal is on the table, we believe it will be impossible to establish the kind of cooperative, bipartisan process we need to truly address the challenges facing the program many decades in the future."

Mr. President, we will not stand for the president's plan is for Social In-Security. 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.