September/October 2001 The Organizer

Don't Use the Sept. 11 Tragedy to Loot Social Security!

By Alan Benjamin

A story that is buried in the financial pages should have every working
family up in arms. The Bush administration, with the willing
collaboration of leading figures in the Democratic Party, is using the
tragedy of Sept. 11 to try to rob working people of trillions of
dollars in Social Security.

The Wall Street Journal, in an editorial dated Sept. 19, was among the
first to call on Bush to hurry up and take advantage of the "unique
political climate" created by the Sept. 11 events to "assert his
leadership not just on security and foreign policy but across the

Specifically, the Wall Street Journal summoned the president to move
ahead on faster tax-rate cuts, expanded oil drilling in Alaska,
fast-track authority for trade negotiations -- and, yes, dipping into
the Social Security surplus to fund some of his new military

A few weeks later, a leading figure in the Clinton administration
joined the chorus. In an op-ed article published in the Oct. 8 New York
Times, Laura Tyson -- former chief economic adviser to Bill Clinton and
current dean of the Haas School of Business at the University of
California at Berkeley -- argues that the only way the United States
can fund its protracted, multifaceted war on terrorism is to use "funds
pledged to Medicare and Social Security." She calls this a "temporary
raid on the Medicare and Social Security surpluses."

But just how temporary? "The costs of the war are likely to last for
years," Tyson continues, "and they will be high." In a word, this
"justifiable" raid could go on for many years.

All will not be rosy, Tyson acknowledges, as the government may not
have the money down the road to pay recipients the Social Security
checks they are entitled to. "Slicing into the Medicare and Social
Security surpluses now will only make the day of reckoning, when the
baby boomers begin to retire, more painful, Tyson states. "The
government will then be forced to choose between higher payroll taxes,
reduced retirement benefits and escalating budget deficits."

The meaning is clear: That portion of every working person's paycheck
that was deducted month after month to help pay for retirement may not
be there after all when the time to retire comes. The "day of
reckoning" may be painful -- meaning that retirement benefits may be
reduced, or the retirement age may be increased (another form of
theft), or the funds simply may have disappeared into all sorts of
speculative ventures. Whatever the form, it's highway robbery, pure and

Aren't these funds off limits?

Many working people have a hard time believing that the government has
the right to tamper with funds set aside explicitly to pay retirees
their Social Security benefits. How did this come to pass?

It didn't all begin with Sept. 11. A number of laws passed since the
early 1980s have paved the way.

First came a law that took Social Security funds, which had been held
separate from general revenues in their own trust account, and folded
them into the government's accounting system. This gave the government
direct access to these funds.

Then came a law demanding a balanced budget, forcing the government to
cut spending if tax revenues drop. This was followed by the huge tax
cut for the rich, sugar-coated with insignificant tax rebate checks for
the nation's working families. All this created what the government
calls a "cash flow squeeze" and set the stage for doing something a
majority in Congress vowed not to do before Sept. 11 -- and that is,
dip into the Social Security surplus to pay for tax cuts or government

A perfect pretext

The call from corporate America to "overhaul" Social Security did not
originate with the Sept. 11 tragedy. In fact, during his first months
in office, Bush handpicked a group of businessmen to propose the
revamping of the entire Social Security system. This included plans to
dip into the Social Security surplus while also raising the retirement
age and reducing both the retirement benefit and cost-of-living

But how to carry out this looting of the Social Security fund in the
face of major opposition in the Congress? The Sept. 11 events have
provided Bush and his corporate buddies with the perfect pretext.
Democrats -- all-too-eager to jump on the bandwagon of "national unity
to fight terrorism" -- have dropped their oppositionist stance,
embracing this corporate raid of workers' hard-earned money.

Admittedly, the Social Security checks paid out every month to retirees
are limited. But for many older people, they are the difference between
eating and starving, between having a roof over one's head and living
on the street. With the stocks-based retirement plans rapidly losing
value, moreover, it is evident that no 401(K) plan and no investment
scheme can take the place of a government-guaranteed retirement fund.

More than ever it is necessary to demand: Bush and the Congress, Hands
Off Social Security!



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