most exactly five years ago, a senior member of the United
States Senate took the floor to deliver an impassioned denunciation of the
landmark “welfare-reform” bill passed by Congress that summer and signed by
President Bill Clinton. As a noted scholar and historian of the nation’s
social-insurance systems, the distinguished legislator went beyond detailing
his complaints against various aspects of the welfare measure to place the
issue in context-and to alert the American people to its ominous meaning.
“It is the first step in dismantling the social contract
that has been in place in the United States since at least the 1930’s,” roared
Daniel Patrick Moynihan, Democrat of New York and prophet of doom. “Do not
doubt that Social Security itself, which is to say insured retirement benefits,
will be next. The bill will be called ‘The Individual Retirement Account
Insurance Act.’ Something such.”
Something such, as he so
disdainfully put it, will soon be thrust upon us, courtesy of President Bush’s
Commission on Social Security. Stacked exclusively with proponents of
privatization, that outfit’s avowed purpose is to push through the kind of
legislation foreseen by Mr. Moynihan back in 1996.
Overpraised though he was during and after his years in the
Senate, which ended when he retired last January, Mr. Moynihan’s vision was
often acute. What he understandably failed to predict when he made that
famously foreboding Senate speech was his own gradual transformation into a
“bipartisan” instrument for the same destructive scheme.
Certainly that’s the part being played by the white-maned
sage these days. Scarcely a month after its first meeting, which Mr. Moynihan
co-chaired, the Bush commission is promoting a scary scenario of Social
Security bankruptcy that lends official credence to a similar scare campaign long
promoted by Wall Street interests. With Mr. Moynihan’s connivance, they now
suggest that the system which has functioned so admirably for the past seven
decades will hover at the edge of insolvency by 2016.
The rescue plan evidently being prepared by the former
Senator and his colleagues is to turn over a glittering chunk of Social
Security revenues to the private sector. The most outstanding among the many
defects in this “solution” is the absence of a real problem to be solved.
Using actuarially conservative methodology, most experts
believe that Social Security will be adequately financed until 2038. That
analysis is based on expectations about national economic performance
considerably more modest than those used by George W. Bush and his minions to justify
their enormous, wealth-squandering tax cut. Those projections also happen to be
far more realistic than the irrational exuberance encouraged by privatization
advocates, who advertise their plan as a way for wage-earners to get rich.
In other words, Mr. Bush and, by extension, his pliant
friend Mr. Moynihan are mounting a kind of fraud. Under one shell is Social
Security, supposedly going bankrupt according to one set of macroeconomic
forecasts; under another shell is the tax cut, supposedly prudent and
affordable according to another, virtually opposite set of numbers. Simply put,
both cannot be true.
Moreover, as economists
including Paul Krugman and Dean Baker have pointed out, the
Bush-Moynihan commission’s alarms are phony in yet another respect. The
commission claims that the trillions being accumulated by the Social Security
trust fund are fictitious because those assets are invested in U.S. Treasury
bonds. Those bonds are deemed to be the safest investments in the world when
they appear in the portfolios of private investors and pension funds, but are
now alleged to be worthless when held by the government in trust for American
workers. It’s a transparently fake argument that must provoke quiet laughter
among the billionaires whose fortunes are made and safeguarded in those same
One study after another has demonstrated that Social
Security can continue to cover all its obligations well beyond 2038, despite
the longer average life span of a shrinking work force. What may be required
are adjustments of taxation, benefits and coverage, although nothing so
disruptive and dangerous as the privatizers pretend will be necessary.
That optimistic outlook was still shared by Mr. Moynihan
less than two years ago, when he accepted a personal award from the Social
Security Administration for his “untiring support” of the agency and its
mission. While his remarks noted that the system faces long-term financing
problems-meaning sometime around 2075-he also said that “four simple steps” would
solve them, such as phasing in coverage of state and local government employees
and adjusting the Consumer Price Index to accurately reflect prices.
“A few other small changes and no problems,” Mr. Moynihan
assured his admiring audience in October 1999. Right he was, and nothing that
has occurred since ought to have altered his learned assessment. Nothing, that
is, except the precipitous decline in stock values, which demonstrated how
perilous “something such” as privatization could prove to America’s future.