Today's Sunbeam

State Dems Criticize Bush's Benefits Plan

Today's Sunbeam — Tuesday, February 15, 2005

By TERRENCE DOPP
Staff Writer

TRENTON — President George W. Bush's plan to allow younger workers to create private social security accounts is a risky scheme that would imperil benefits for all, several New Jersey Democrats and activists warned Monday.

U.S. Rep. Robert Andrews also said Bush has so far sold the plan, which has not been introduced in Congress, by creating a false crisis in the program.

The president's plan hinges upon his assertion investing in some government approved stocks and bonds would create larger returns for enrollees than the guaranteed benefits now promised by its guidelines. Benefits are indexed to the rate of inflation.

"It's going to hurt a lot of people. This plan is no good," Andrews said during a Trenton news conference in which four House Democrats pledged to vote against privatization.

The move toward a free market approach to running 70-year-old system has drawn resistance from Democrats and been met with consternation from some Republicans. The Current Social Security system functions by active workers fund benefits for retirees through payroll deductions.

Andrews and Democrats said allowing younger works to divert Social Security taxes into private accounts would force the government to make stark cuts in benefits or borrow to cover the shortfall. Like any market, they said, some will walk away losing money.

"There will be no private Social Security on my watch," Andrews, D-Haddon Heights, added.

Approximately 1.36 million people in the Garden State are enrolled in the program, according to Citizen Action. Over 100,000 of those recipients are children and 140,000 disabled workers and would lose out from the Bush proposal, they said.

The Bush Administration contends a crisis looms as an aging workforce threatens to swamp the system. The non-partisan Congressional Budget Office estimates benefits paid out will exceed money in the system in 2052.

Covering the transition from the traditional system to a partly private system would cost an estimated $2 trillion over the next 20 years.

"There is no Social Security crisis. It's the domestic equivalent of weapons of mass destruction," said David H. Weiner, a member of Citizen Action's board of directors. "The only ones who stand to gain from the president's plan are Wall Street and the fund managers."

In his State of the Union speech, Bush proposed allowing workers to invest a portion of their Social Security deductions in private investment accounts.

In return for the prospect of these private sector investments paying higher benefits those enrolled in the proposed system would agree to take lesser benefits.

"Here is why personal accounts are a better deal: Your money will grow, over time, at a greater rate than anything the current system can deliver," Bush said in his State of the Union speech.

According to CNN reports, he also added, "I have a message for every American who is 55 or older: Do not let anyone mislead you. For you, the Social Security system will not change in any way."

U.S. Rep. Rush Holt, D-Mercer/Hunterdon, disagreed saying Bush's claims were disingenuous.

He said enough money currently exists in the plan to guarantee full benefits to any worker over 20 and all those living today will receive at least 75 percent of those benefits currently guaranteed.

"This is not just about dollars and sense. It's about dignity and self-sufficiency and self respect," Holt told reporters and dozens of senior citizens gathered at the State House. "Social Security is about everyone.

Especially those who think they'll never need it."

Bush recently wrapped up a tour of Arkansas, North Dakota, Montana, Florida and Nebraska to pitch the privatization plan. All five states have at least one Democratic senator the administration hopes to target in the next election if they don't vote for it, according to published reports.

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