Democrat Nancy Pelosi (San Francisco) is set to be the first female speaker of the House of Representatives in U.S. history. Among other domestic policies of the new Democratic majority under her lead, she has vowed to “preserve” Social Security. The popular federal program pays benefits to nearly one of every six Americans.
The Democratic majority is arriving in the wake of President George W. Bush,s failed attempt last year to change Social Security with private savings accounts for younger workers. He claimed that his plan would keep the program solvent for their future. One of the underreported stories of 2005 was the U.S. public,s successful opposition to Bush,s plan.
Against this backdrop, the 2004 Social Security Trustees Report projects the year 2042 as the depletion date of the Social Security trust fund. By design of the 1983 Greenspan Commission, the trust fund is running a surplus of Social Security payroll taxes from employees, employers and the self-employed. Even if the trust fund is depleted in 2042, Social Security,s tax revenues alone will fund 75 percent of the benefits due to recipients, writes Doug Orr, a professor of economics at Eastern Washington University, in the summer 2006 Review of Radical Political Economics.
And what does the non-partisan Congressional Budget Office,s forecast for Social Security? The CBO projects that Social Security is fully funded to pay disability, retirement and survivor benefits for the next 40 years. This is with no funding changes to the popular program.
Meanwhile, the securities and investment industry contributed a total of $48,276,563 to federal candidates and parties in the 2006 election cycle, according to the Center for Responsive Politics. Democrats got $24,878,830 of the total versus the GOP,s $22,538,828. Firms such as Goldman Sachs, Morgan Stanley and Merrill Lynch lead the way with these bi-partisan campaign contributions.
The securities and investment industry has been leading the charge to privatize Social Security, speaking through the American Enterprise Institute, Cato Institute and Heritage Foundation. Why? For starters, there are hefty fees to collect for setting up and overseeing millions of private savings accounts.
Representative Pelosi promised to “guarantee a dignified retirement by preserving Social Security” on December 14. How the Pelosi-led party plans to do that is the political question.
Will the Democratic majority be able to stand up for the American public against the securities and investment industry? Only if Main Street USA thinks and acts on what the Democrats say and do concerning the preservation of Social Security. As is, the program is solvent for the long-term.