AP's Johnson reported McCain claim that private accounts will improve Social Security solvency, without noting that it's false
SUMMARY: The Associated Press reported that Sen. John McCain "says all options must be considered to stave off insolvency for the government insurance and retirement program [Social Security], and top McCain advisers say that includes so-called personal retirement accounts like those President Bush pushed in 2005 but abandoned in the face of congressional opposition." In fact, the Bush administration itself has admitted that private accounts themselves would do nothing to address Social Security's projected long-term revenue shortfall.
In a September 19 Associated Press article, Glen Johnson reported that advisers to Sen. John McCain say that "so-called personal retirement accounts" are an option "to stave off insolvency" for Social Security without noting that the claim is false. Johnson reported that McCain "says all options must be considered to stave off insolvency for the government insurance and retirement program, and top McCain advisers say that includes so-called personal retirement accounts like those President Bush pushed in 2005 but abandoned in the face of congressional opposition." In fact, the Bush administration itself has admitted that private accounts themselves would do nothing to address Social Security's projected long-term revenue shortfall, as Media Matters for America documented.
As Media Matters has noted, Bush proposed allowing workers to divert up to 4 percent of wages subject to the payroll tax (about one-third of their payroll taxes) into a private account, removing it from the money available to pay Social Security benefits for current retirees. Far from addressing a projected shortfall, the diversion would create a large gap between revenue and the funds necessary to cover the government's obligation to current Social Security recipients. This gap would continue until the death of all recipients who will receive full benefits (under the plan Bush proposed in 2005, all those born before 1950 would have received full benefits). Vice President Dick Cheney has reportedly acknowledged that the cost of covering this shortfall would be in the trillions of dollars.
In the article, Johnson quoted Standard and Poor's chief economist David Wyss' assertion of private accounts, "I think it's a good idea, but again, it doesn't solve the immediate problem." But Johnson did not specify the "immediate problem" to which Wyss referred.
Further, Johnson uncritically quoted McCain's false statement that Social Security "will not be there for present day men and women who are working." In fact, as Media Matters has noted, the 2008 Social Security trustees' report forecast that Social Security will be able to pay full benefits until 2041. According to the same report, the Social Security program will not "go broke" when the trust fund is depleted in 2041, but rather be able to cover between 78 percent and 75 percent of scheduled benefits through the end of the 75-year period the report's long-range projection covered.
From the AP article:
Wall Street turmoil left John McCain scrambling to explain why the fundamentals of the U.S. economy remained strong. It also left him defending his support for privately investing Social Security money in the same markets that had tanked earlier in the week.
The Republican presidential nominee says all options must be considered to stave off insolvency for the government insurance and retirement program, and top McCain advisers say that includes so-called personal retirement accounts like those President Bush pushed in 2005 but abandoned in the face of congressional opposition.
The aides tried to soothe voters concerned about the bankruptcies, takeovers and bailouts on Wall Street by declaring McCain favored only the option of such accounts, just for younger workers, and most likely in a conservative investment vehicle such as bonds.
[...]
McCain calls such a tax punitive and counterproductive. He also says refusing to discuss private accounts amounts to political posturing. He says his willingness to broach the subject is emblematic of his "Country First" campaign motto and harkens back to bipartisan discussions between President Reagan and Democratic House Speaker Tip O'Neill Jr. the last time the system was revamped in 1983.
"We have to have some straight talk for America. The Social Security system is going to go broke. It will not be there for present day men and women who are working. And we have to fix it and we have to do it in a bipartisan fashion," the Arizona senator said Wednesday during a town hall meeting with running mate Sarah Palin in Grand Rapids, Mich.
He added: "We have to realize that the worst thing we can do is continue to allow these unfunded debts to mount, and to pass on to another generation of Americans a burden that we've imposed on them."
[...]
By about 2020, more people will be drawing on the system than will be paying into it, and the government projects Social Security could be insolvent around 2040. Those projections change slightly each year.
"I think it's a good idea, but again, it doesn't solve the immediate problem," said Wyss. "And you also have to make sure you maintain an adequate safety net because you don't want people eating cat food in retirement."
When they have this paragraph in their news report
The Republican presidential nominee says all options must be considered to stave off insolvency for the government insurance and retirement program, and top McCain advisers say that includes so-called personal retirement accounts like those President Bush pushed in 2005 but abandoned in the face of congressional opposition.
And don't then say that, contrary to McCain's advisors, personal retirement accounts don't do anything towards helping the solvency of Social Security, it furthers the conservative agenda. It makes McCain's idea look better than it deserves to look, and therefore makes McCain look better than it deserves to look!
Yeah, and just think how much money we all would make on our accounts!!...er....
In fact, the Bush administration itself has admitted that private accounts themselves would do nothing to address Social Security's projected long-term revenue shortfall.
And I believe in my humble opinion that other than Iraq , Bushs economic policies have been even more dangerous to our nations future. AP is wrong in attempting to spin this in McCains advantage.
the question to always be asked is, what happens if you invest your account and you lose part or all of it? does the government need to step in and help you if you are destitute? or should you starve?
That's an especially poignant question when one considers what started Social Security. Families could not longer be counted upon to support all their extended relatives - people moved away from their families in the 20th century like never before. Poor houses had stopped being an option, so what was an elderly person to do - work 'til they died?
It was because when families supported their elderly, they were destitute, and when there was no family, they starved. It was determined that as a rich nation, we could do better, and our elderly deserved better.
Because families can be too far away to help, or too destitute themselves, Social Security was developed to be a safety net - it wasn't intended to make anyone rich, or even middle class - it was intended to keep them from starving, to be a security blanket for them. Because that's its mission, it is anathema to the purpose of Social Security to put any of the benefits at risk!!!!! The benefits must never be put at risk. Ever.
To think that private accounts that could put that security blanket at risk would ever be considered is blasphemy! It's because of the risks of being destitute and starving posed for the elderly and disabled that the program was begun!!!
I cannot believe McCain would mention Bush's "private ss accounts. I have watched my ira and other mutual funds take major swan dives lately ---just can;t imagine the panic when people saw their Social Security accounts evaporate. Truly Gramps has alzheimers setting in.
Bush's own accounting office, in a report a coulpe of years ago admitted that even if we did nothing, Social Security would be fine until 2040 or 2050. ( I can't remember which) After which, if we did nothing, it would then pay 85% of its benefits. So all it needs to be fine is minor tweaking so it will keep paying 100% after 2040 or 50. Removing the cap would be one way.
There's a chance if the economy does well enough over the next 30 years that nothing actually will need to be done - the Social Security evaluators assume that the economy won't do as well as it has in the past. Now, considering how screwed up the Republicans have made it, that assumption might be correct!
there is also the fact that a lot of people indicate that they intend to work either full or part time well past 65. and that's already happening. the number of people past 65 working now is already up considerably from 20 years ago. one of the extra benefits of that is that they can be getting ss benefits on one hand, but be paying income taxes and ss taxes on the income they make, which will help the bottom line of the ss fund.