Privatization of Social Security

PRIVATIZATION OF SOCIAL SECURITY—10/23/08

INTRO: For the last eight years, President Bush has repeatedly attempted to privatize Social Security and Medicare. We warned you about the dangers of this approach, and I told you these efforts at privatization could destroy these two critical pillars on which the health and security of our nation's seniors are built.

1. LET'S START WITH SOCIAL SECURITY:

Before Social Security, people just invested their own money for retirement. That was the ultimate in privatization. How'd it go?

A. Not good. Millions of older folks spent their later years in poverty, without enough money for food, clothing, medicines or housing.

2. HOW HAS SOCIAL SECURITY WORKED?

A. Very well. People who worked get a basic income of about $1000/month. Not a lot, but for 2/3 of Americans 65 and older, Social Security makes up most or all of their income. For them, it's a lifesaver.

3. PRESIDENT BUSH ARGUED THAT PEOPLE CAN INVEST THEIR OWN MONEY BETTER THAN THE GOVERNMENT CAN. SO HE PUSHED TO MOVE SOCIAL SECURITY INTO PRIVATE INVESTMENT ACCOUNTS. WHAT WOULD BE WRONG WITH THAT?

A. Just look at the recent stock market crash. Do I have to say more? Social Security is a safety net which would be torn asunder if left to the ups and downs of the market.

4. BUT ISN'T SOCIAL SECURITY AS IT NOW STANDS GOING BROKE?

A. No. The Social Security Trustees say that, without any changes, Social Security can pay all benefits for more than 3 decades. And after that, it will still be able to pay 70% of all scheduled benefits.

And the Social Security shortfall can be corrected pretty painlessly. For example, the entire Social Security problem could be fixed just by slightly reducing President Bush's tax cuts for the top 1% of wealthiest Americans, and using that money for Social Security.

5. WHAT'S THE STATUS OF THE GOVERNMENT'S EFFORTS TO PRIVATIZE SOCIAL SECURITY?

A. I think we're safe – for now!

6. LET'S SWITCH TO MEDICARE. WHILE THE GOVERNMENT LOUDLY ANNOUNCED ITS EFFORTS TO PRIVATIZE SOCIAL SECURITY, IT QUIETLY HAS TAKEN STEPS TO PRIVATIZE MEDICARE.

A. The government has been promoting private Medicare Advantage Plans, trying to get people to leave traditional Medicare.

This is done by subsidizing the private companies, paying them billions of dollars. The private companies are doing 2 things with this money: first, they are using it to give people better benefits and lower co-pays than they can get under regular Medicare, to lure them. And second, the private companies are pocketing a huge extra profit.

7. WHAT'S THE PROBLEM WITH THIS?

A. The private companies are picking healthy consumers, leaving the most ill patients in cash-starved Medicare programs.

On the other hand, the government is paying more for Medicare by hundreds of millions of dollars a year, due to the subsidies to private companies. So this will leave traditional Medicare in a precarious position – less money to pay for sicker people.

8. IT SOUNDS LIKE TRADITIONAL MEDICARE IS BEING SET UP TO FAIL.

A. Yes, that's my view. Republicans have never liked Medicare, and over the last 8 years have taken steps to put it in an impossible position, so it will die.

Once traditional Medicare is gone, companies offering private Medicare plans can then reduce benefits or raise deductibles and co-pays, leaving consumers in a terrible spot.

9. WHAT DO YOU RECOMMEND?

A. Call your U.S. representatives and senators. Let them know how important Medicare is, and tell them to stop subsidizing private companies.

CLOSE: Over the years, we've warned you about the dangers of privatizing Social Security and Medicare. We need to be vigilant. Keep watching Golden Opportunities – we'll let you know what your government officials are doing.