Fact Check on Bush's Social Security Proposals

Fact Check, a nonpartisan project from the Annenberg Public Policy Center, has issued a report on George Bush's plans to partially privitize Social Security:

Bush's State of the Union: Social Security "Bankruptcy?"

That term could give the wrong idea. Bush also makes private accounts sound like a sure thing, which they are not.

February 3, 2005

Summary

In his State of the Union Address, President Bush said again that the Social Security system is headed for "bankruptcy," a term that could give the wrong idea. Actually, even if it goes "bankrupt" a few decades from now, the system would still be able to pay about three-quarters of the benefits now promised.

Bush also made his proposed private Social Security accounts sound like a sure thing, which they are not. He said they "will" grow fast enough to provide a better return than the present system. History suggests that will be so, but nobody can predict what stock and bond markets will do in the future.

Bush left out any mention of what workers would have to give up to get those private acounts -- a proportional reduction or offset in guaranteed Social Security retirement benefits. He also glossed over the fact that money in private accounts would be "owned" by workers only in a very limited sense -- under strict conditions which the President referred to as "guidelines." Many retirees, and possibly the vast majority, wouldn't be able to touch their Social Security nest egg directly, even after retirement, because the government would take some or all of it back and convert it to a stream of payments guaranteed for life.

Full Report

Related News:

The Wall Street Journal looked at similar privitization programs in other countries yesterday. I've started a small library of articles on Social Security at the Kerry 2004 Reference Library, including this article.