Cantwell Says "Privatized Accounts" Shoudn't Be Funded with Social Security Dollars
Senators urge White Hosue to reject major "obstacle"to bipartisan Social Security reform
WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) this week joined 41 other senators in sending a letter to President Bush, urging the administration to drop its proposal to fund privatized investment accounts with Social Security funds. The senators called this element of the administration's proposal a "serious obstacle" to bipartisan reform of Social Security, and touted a plan that would safeguard the program's guaranteed benefits and fundamental purpose.
While U.S. Treasury Secretary Snow has indicated the president would consider abandoning the notion of funding private accounts with Social Security dollars—instead, establishing an entirely separate program to support individual investment accounts—subsequent press reports have suggested this was merely a tactical maneuver by the White House.
"Given the conflicting and ambiguous reports on such a critical issue, we urge you to publicly and unambiguously announce that you reject privatized accounts funded with Social Security dollars or otherwise linked to the provision of guaranteed Social Security benefits," wrote the senators. "Such a statement would eliminate a serious obstacle to the kind of bipartisan process that Democrats are seeking to deal with Social Security's long-term challenges and to improve the retirement security of all Americans."
The text of the letter follows below:
The President The White House 1600 Pennsylvania Avenue, N.W. Washington, D.C.
Dear Mr. President:
We write in the hope that we can achieve a bipartisan agreement to strengthen Social Security for the long term and enhance the retirement security of all Americans.
Soon after your reelection, you made clear that your Administration's top priority is to move toward the privatization of Social Security. Your proposal would cut Social Security's funding by diverting payroll taxes into privatized accounts, which would weaken the program and force deep cuts in benefits. Your Administration also acknowledged that the proposal would require borrowing trillions of dollars, much of which we know would come from foreign countries like China and Japan.
Democrats in the Congress believe this approach is unacceptable, and it appears that most Americans agree with us. Funding privatized accounts with Social Security dollars would not only make the program's long term problems worse, but many believe it represents a first step toward undermining the program's fundamental goals. Therefore, so long as this proposal is on the table, we believe it will be impossible to establish the kind of cooperative, bipartisan process we need to truly address the challenges facing the program many decades in the future.
We were encouraged that Treasury Secretary John Snow suggested that you might be willing to abandon your privatization proposal and move instead to an alternative approach in which investment accounts would be established entirely separate and apart from Social Security. As you know, many Democrats, including President Bill Clinton, have advocated just such an approach, with benefits targeted to working and middle class families who need help the most. So long as such accounts remain entirely independent from Social Security and do not put the program's guaranteed benefits at risk in any way, we believe they deserve serious consideration as part of a broader effort to promote retirement security.
While Secretary Snow's suggestion was initially encouraging, subsequent reports indicate that you remain committed to your privatization plan and his public comments were little more than a tactical maneuver. According to a story in today's Washington Post, "White House officials are privately telling Republicans that Bush is opposed to the idea [of accounts outside of Social Security], but does not want to say so because it would appear he is not willing to compromise."
Given the conflicting and ambiguous reports on such a critical issue, we urge you to publicly and unambiguously announce that you reject privatized accounts funded with Social Security dollars or otherwise linked to the provision of guaranteed Social Security benefits. Such a statement would eliminate a serious obstacle to the kind of bipartisan process that Democrats are seeking to deal with Social Security's long-term challenges and to improve the retirement security of all Americans.
Thank you for your consideration of our views.
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