>
> Yes. And if Kerry wins there will be a serious threat to social
> security. We can't depend on Monica any longer to save it.
>
> Carrol
Channelling the Cato Inst. now, Carrol?
http://www.google.com/search?q=kerry+social+security
http://www.cato.org/dailys/09-03-04-2.html
http://www.johnkerry.com/pressroom/releases/pr_2004_0922.html
> ... Citing a new study that finds George W. Bush’s Social Security
> privatization plan will provide a $940 billion windfall to the financial
> industry while cutting benefits for seniors, Democratic presidential
> nominee John Kerry said the president has wrongly chosen to put his well
> connected friends above seniors and families...According to the study,
> the financial services industry will reap billions of dollars as part of
> the largest windfall in financial history. At the same time, a
> Congressional Budget Office study found that the President's plan will
> cut Social Security benefits by up to 45 percent.
Bush’s plan will also drain $2 trillion from Social Security over the next decade and increase the budget deficit through 2050. It is a plan that is particularly devastating for women, who make up 60 percent of Social Security recipients.
“Under the Bush scheme, the people who manage private Social Security accounts stand to get $940 billion dollars,” Kerry said. “That’s $940 billion that we should be using to protect benefits for our seniors. $940 billion that we should be using to save Social Security.”
Not surprisingly, the financial services industry – the very industry that stands to gain billions - is actively supporting and mobilizing behind the president’s campaign. Nearly 100 individuals from this community have signed up as Pioneers and Rangers for the Bush-Cheney campaign, and the president has received nearly $8 million from the securities and investment industries. Several financial services firms that stand to gain
from Bush’s plan have even bankrolled pro-privatization front-groups to mobilize behind Bush’s plan.
http://www.washingtonpost.com/wp-dyn/articles/A39923-2004Sep21.html The Politics of Social Security Kerry to Use Study to Call Bush Plan a Wall Street Windfall
By Jonathan Weisman Washington Post Staff Writer Wednesday, September 22, 2004; Page A02
President Bush's push to create individual investment accounts in the Social Security system would hand financial services firms a windfall totaling $940 billion over 75 years, according to a University of Chicago study to be released today.
Sen. John F. Kerry plans to use the paper, by economist Austan Goolsbee, as he campaigns in Florida today, hoping to open a new line of attack against Bush. The Democratic presidential nominee is expected to say that Bush's Social Security plan is a sop to Wall Street donors, who are among the Bush campaign's biggest financial backers. Bush has expressed strong support for allowing workers to divert some of their Social Security taxes to accounts that could be invested in stocks and bonds. But he has never embraced a specific proposal to revamp Social Security, even after his own Social Security Commission presented him with three reform options. Goolsbee, an informal Kerry economic adviser, examined the option that is often cited as the most realistic.
Under that plan, workers could invest as much as 2.5 percent of their earnings -- or about 40 percent of their share of Social Security taxes -- in private accounts, which Goolsbee anticipates would be managed by private investment firms once their balances reach $5,000. He estimated that annual management fees would be 0.8 percent, a conservative figure, he said, considering that management fees across the spectrum of mutual funds average 1.09 percent.
The result: Over 75 years, fees would total $940 billion, more than a quarter of the $3.7 trillion deficit the Social Security system will run over that time period. That would be the largest windfall in U.S. financial history, Goolsbee said, more than eight times the revenue loss that Wall Street suffered during the 2000-02 stock market collapse.
Scott Stanzel, a spokesman for the Bush campaign, called the analysis "a Kerry campaign pseudo-study" and "an attempt to divert attention from the fact that John Kerry does not have a plan to strengthen Social Security."
Financial and insurance industry officials have donated $20.7 million to Republicans this campaign season, compared with $11.4 million they have given Democrats, according to the nonpartisan Political Moneyline.com. But Kerry has showcased his support from executives to bolster his contention that his fiscal policies would ease market anxieties over record budget deficits.
Still, the Kerry campaign's economic policy director, Jason Furman, said the candidate would not hesitate to link Bush's Social Security position to his donor base.
"This study makes it clear when you choose individual accounts, seniors get hurt, the economy gets hurt, and the only institutions that benefit are the financial institutions that get nearly a trillion dollars in additional revenues," Furman said.
Michael Tanner, a Cato Institute analyst who has pushed for individual accounts, said Goolsbee's administrative cost estimate is slightly higher than Cato's, which put management fees at as much as 0.65 percent, but "not unrealistic."
White House officials questioned why Goolsbee assumes management of the accounts would shift from the federal government to private fund managers. Bush's Social Security Commission suggested that shift could happen but did not mandate it.
The windfall to Wall Street is unavoidable, Tanner said. "The question is whether we're giving young workers more of a return [on investment] than they'll be getting today." -- Michael Pugliese