McCain’s record on privatization of Social Secuirty

Posted by AzBlueMeanie:

It has been a very bad week for many retirement funds and 401(k) accounts invested in the stock market, with the melt down of the financial system.  For many people, their only retirement fund is the safety net of Social Security. Just imagine what might have occurred had George W. Bush and John McCain succeeded in privatizing the Social Security Trust Fund and invested it in the stock market.

The AFL-CIO earlier this year compiled John McCain’s record on privatization of Social Security John McCain Revealed: Retirement Security:

McCain Voted for Bush’s 2006 Social Security Privatization Plan. In 2006, McCain voted for the Social Security Reserve Fund. The proposal would shift Social Security’s annual surpluses into a reserve account that would be converted into risky private accounts. [SCR 83, Vote #68, 3/16/06; SCR 83, Vote #68, 3/16/06]

In 2000 McCain Wanted to Divert Social Security Money to Private Accounts. The Wall Street Journal reported that “[a] centerpiece of a McCain presidential bid in 2000 was a plan to divert a portion of Social Security payroll taxes to fund private accounts, much as President Bush proposed unsuccessfully.” The plan would put workers’ retirement money into the risky market and reduce the amount of Social Security payments they would receive from the government. The plan would undermine the Social Security system. [Wall Street Journal, 3/3/08]

McCain STILL Proposes Privatizing Social Security—Despite What His Website Says. McCain told the Wall Street Journal he still backs a system of private retirement accounts that he supported in 2000 and President Bush pushed unsuccessfully. The Journal reported he “disowned” details of a proposal on his 2008 campaign website that says he would “supplement” the existing Social Security system with personally managed accounts. But when asked about the position change he denied it and promised to change the website to reflect his true position. “I’m totally in favor of personal savings accounts… As part of Social Security reform, I believe that private savings accounts are a part of it—along the lines  that President Bush proposed,” McCain told the Journal.[Wall Street Journal, 3/3/08; Campaign Website, accessed 3/3/08]

McCain Might Raise the Retirement Age and Reduce Cost-of-Living Adjustments. “[T]he McCain campaign says the candidate intends to keep Social Security solvent by reducing the growth in benefits over the coming decades to match projected growth in payroll tax revenues. Among the options are extending the retirement age to 68 and reducing cost-of-living adjustments, but the campaign hasn’t made any final decisions. ‘You can’t keep promises made to retirees,’ said Mr. Holtz-Eakin, McCain’s chief economic aide.” [Wall Street Journal, 3/3/08]

McCain Supported Deep Cuts That Put Social Security Benefits at Risk. In 2005, McCain supported a Social Security plan that would require deep benefit cuts or a massive increase in debt. That same year, McCain voted against prioritizing Social Security solvency over tax cuts for the wealthy. [SCR 18, Vote #49, 3/15/05; S. Amdt. 144 to SCR 18, Vote #47, 3/15/05]

McCain Voted to Use Social Security Money to Pay Off National Debt. In 2003, McCain voted to use Social Security funds to pay off federal debt. [HJR 51, Vote #201, 5/23/03]

McCain Voted Against Protecting Social Security Solvency with a Strategic Reserve. In 2001, McCain opposed reducing tax cuts for the wealthy to create a strategic reserve for Social Security. In the same year, McCain voted against a proposal to create “lockboxes” to protect Social Security and Medicare. [H.R. 1836, Senate RPC, Vote #145, 5/22/01; S. Amdt. 29, Vote #22, 3/13/01]

McCain Voted to Replace Social Security with Risk-Based Investments. In 1998, McCain voted twice to replace Social Security’s guaranteed benefits with income from risk-based private investments. [SCR 86, Vote #56, 4/1/98; SCR 86, Vote #77, 4/1/98]

In June of this year, McCain asserted in a town hall that "I’m not for, quote, privatizing Social Security.  I have never been.  I never will be." McCain denies his record of supporting Social Security privatization (his record says otherwise). 

Yet in July of this year, the Los Angeles Times reported McCain takes a Social Security risk – Los Angeles Times that:

McCain’s remarks on Social Security came during a week that showcased his ideas for the economy. When asked by a young woman at a Denver town hall meeting last Monday how to make Social Security viable for her generation, he said she could not rely on the system "unless we fix it."

"We are paying present-day retirees with the taxes paid by young workers in America today," he said. "And that’s a disgrace. It’s an absolute disgrace, and it’s got to be fixed."

His comments seemed to suggest that McCain favored a new funding mechanism for Social Security benefits, such as private accounts. Later, on CNN, McCain seemed to fully embrace the idea of private accounts. "I want young workers to be able to, if they choose, to take part of their own money, which is their taxes, and put it in an account which has their name on it," he said. Participation would be a "voluntary thing," he said, and "would not affect any present-day retirees or the system as necessary."

As late as September 7, 2008, the Wall Street Journal  reported McCain, Obama Split Over Social Security that McCain "remains open to personal accounts, also called private accounts, for younger people. Under this system, pushed hard by President Bush in 2005, workers could divert some of the taxes that normally would go to pay Social Security benefits into personal accounts invested in stocks and/or bonds. In trade, their guaranteed checks from the government would go down, increasing both the possibility of risk and reward for participants, depending on how the investments fare.

"There may be a role for private investment accounts for younger workers as long as they are not a substitute for insuring the solvency of the system and does not affect the system,” Sen. McCain said.

Sen. McCain has vacillated when describing his position. At times he has declared forthright that he will not raise taxes, period. Other times he has said that everything would be on the table in a bipartisan negotiation.

* * *

Sen. Obama has been much more forthright about how he would bring the program into balance. He says he’ll raise taxes of those earning over $250,000 a year. It’s not clear whether that would be enough to close the entire gap.

"I’ll work with members of Congress from both parties to ask people making more than $250,000 a year to contribute a little bit more to keep the system sound," Sen. Obama said. "It’s a change that would start a decade or more from now, and it won’t burden middle-class families. In fact, 99% of Americans will see absolutely no change in their taxes — 99%." McCain, Obama Split Over Social Security

Watch the Obama campaign’s latest ad on Social Security airing in the battleground states: