Moynihan Plays Patsy for Bush’s Pension Plan

most exactly five years ago, a senior member of the United Sign Up For Our Daily Newsletter Sign Up Thank

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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

government securities.

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.

Moynihan Plays Patsy for Bush’s Pension Plan