Social Security crisis 'manufactured' - Kucinich
Originally published by ILCA
Social Security crisis 'manufactured' â€" Kucinich
By Eric J. Eakin, Bay Village
Rep. Dennis Kucinich, no stranger to controversy, is again in the thick of the fight. The battleground? The Bush Administration's plans to privatize Social Security.
Before a crowd of more than 150 people Sunday in Bay Village, Kucinich took aim at the proposal, riddling it with derision and distain.
In a presentation Kucinich said he spent more than 100 hours researching, the congressman examined the history of the Social Security system, reviewed the administration's planned changes, and explained how these proposals would gut a system he says is sound now and well into the future.
"A crisis is being manufactured on Social Security," he said.
He explained that 90 percent of the elderly receive Social Security payments. These payments account for 50 percent of the income for two-thirds of the nation's elderly and 90 percent of the incomes for a quarter of the aged.
He said the system enjoys a $1.5-trillion surplus now and that the fund will not experience problems until at least 2042 or 2052, depending on different financial scenarios.
"We have 37 to 47 years to solve the 'crisis,'" he said. "Even if we do nothing, it (Social Security) will still be able to pay 73 percent to 78 percent of benefits in 2042 or 2052."
"Social Security is not an investment," Kucinich said. "It is insurance. With investments there are risks. Social Security is to protect you against risk."
Currently, Social Security is a guarantee. Privatizing Social Security would turn it into a risky investment, he said.
Transition costs would total more than $2 trillion, he said. "Privatization does not solve this shortfall; it adds to it," the congressman said. "It's a bad deal for young Americans. They will pay the bill and face the additional risks." Privatization is also a bad deal for women and African Americans because of actuarial and other factors, he said.
He said a number of simple actions could be taken today to shore up the system. He suggested the cap on the amount of income taxed could be raised from the current $90,000 to $140,000; Congress could rescind the tax cuts passed in 2003 that benefit the top one percent of earners (those earning $1.2 million per year or more); the government could increase payroll taxes in 2042 or 2052 when the shortfall begins or designate general funds for the system anytime.
Kucinich was especially perplexed that the Bush Administration would link Social Security benefit levels to the Consumer Price Index rather than an index of wages. "Price indexing has decimated the value of pensions in Great Britain," Kucinich said. In the current system, the value of Social Security's benefits is protected from inflation by a yearly cost-of-living adjustment, Kucinich said. If Social Security were privatized, benefits would no longer be fully protected from inflation.
"There is no other economic program that will have more impact on this and future generations," Kucinich said. "We have undermined our nation's fiscal stability with tax cuts and a war we can not pay for."
When asked if Congress is covered by Social Security, Kucinich joked "the people who have designed this program already have their pensions in place."
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