Volume 3 number 8, August/September 2001 A Racketeer in the White House: Bush Guts Social Security George Bush’s massive tax cut went through this spring and I just got my check for $47.75. Woopie! As Molly Ivins pointed out, 42.5% of this tax cut goes to the wealthiest 1% of all Americans (Anchorage Daily News, Feb.14, 2001, p. B-7, reprinted from the Fort Worth Star-Telegram), so I should not have expected to get very much. At the same time, a Bush presidential commission reported just a few weeks ago that Social Security is in big trouble (Fairbanks Daily News-Miner, July 20, 2001, p. A-6). Could there possibly be a connection between the two? Remember that under the Clinton administration we were running budget surpluses, talking about paying off the entire national debt in 10 years and putting Social Security on a solid footing. So now what is happening with Social Security after the big Bush tax cut? In a recent article in The Ester Republic (June 2001, p. 7) I predicted that the Bush tax cut would cripple social services, education, public universities and basic scientific research for years to come in this country. If we look closely at the news and read between the lines we can see that this is already happening. “Social Security cannot meet its promise to future retirees without reducing benefits, increasing taxes or massive government borrowing,” says the Bush presidential commission draft report (News-Miner 7/20/01, p. A-6). Hold on, we just cut taxes, but in order to save Social Security we’ll have to raise them? Then why did we cut them in the first place? Could it be that making Social Security work is not part of Bush’s agenda? But wait a minute, it gets better.... It seems that over the years Social Security surpluses from the Social Security payments we’ve all been making on every paycheck have in fact been used to finance deficits in the government’s operating budget. In return, the Social Security Trust Fund was credited with government bonds. But now, the draft report of the Bush presidential commission “argues that the trust fund contains only promises of future funds and no real assets because the surpluses were lent to the federal treasury to cover budget deficits.” Since when is a U.S. government bond not a real asset? Does that mean that all those U.S. savings bonds that my mother has ben buying since the Second World War are only “promises of future funds” and not “real assets”? Will the Bush administration try to default on those bonds as well? Furthermore, the Bush commission’s draft report says that “workers and retirees do not own their benefits and have no legal claim to them” and argues that “what they have is a political promise that can be changed at any time, by any amount, for any reason.”(News-Miner 7/20/01, p. A-6) In other words, plenty of money has been paid in Social Security payroll deductions and plenty is still coming in, enough to keep the program going fine until at least 2038, but the money isn’t really there because the government has been using it to cover budget deficits. The Bush presidential commission says that the government may choose not to repay the money taken from the Social Security Trust Fund, and instead just cut Social Security retirement benefits. It is also interesting that the Social Security payroll deductions are now simply called the “payroll tax,” as if they had nothing to do with Social Security. This Social Security payroll tax has been steadily rising since the Reagan administration, to a point where the average American now pays more in Social Security payroll tax than in income tax. Furthermore, Bush recently refused to guarantee that all of this Social Security payroll tax would actually go to the Social Security Trust Fund. Remember, this is a tax paid only by people working on a payroll or with self employment income and only on income below a set limit, which is somewhere between $50,000 and $100,000. Remember, too, that the Bush “tax cut” applies only to income tax. In a very sneaky way Bush is trying to shift the tax burden from a graduated income tax, which gradually increases the more money a person makes, to a payroll tax, which falls mostly on middle and lower income working people. You see, if Bush does not have to reimburse the Social Security Trust Fund for the money borrowed over the years to cover government budget deficits, then instead of paying retirement benefits he can effectively use the Social Security Trust Fund and the Social Security payroll tax to pay off the deficit, and he can also afford his massive income tax cut, 42.5% of which goes to to the wealthiest 1% of all Americans. The ruthless, self-destructive greed of Bush and the small group of rich and powerful people who are behind him is truly frightening. We live in a time when the gap between the rich and the poor is rapidly increasing, when the average corporate CEO’s salary has increased from 80 times that of the average worker in 1990 to 485 times that of the average worker in 1999 (Molly Ivins, Anchorage Daily News 2/14/2001, p. B-7). It was precisely this kind of greed on the part of the nineteenth century corporate robber barons which led America to pass a graduated income tax, Social Security and restrictions on corporate monopolies in the first part of the twentieth century. Americans of that time realized that an economy is like a game of marbles in that if one person or one small group of people gets all the marbles, then the game is over. They also realized that so-called “free” competition between a large corporation and a small business or an individual was like Muhammed Ali in the boxing ring fighting a midget (see Ida Tarbell’s early twentieth-century history of John D. Rockefeller’s Standard Oil Company). Throughout most of the twentieth century, the graduated income tax, Social Security, and restrictions on corporate monopolies were central to America’s prosperity because they acted as a brake or a handicap on the greed of the rich, preventing the stultifying concentration of wealth in a few hands, which causes economic stagnation, for example, in much of the Third World. These measures were what allowed the growth and development of a large and extremely productive middle class in America. Now, self-destructive, robber-baron greed is back, attacking the basis of American prosperity, as Bush moves rapidly to destroy Social Security and the graduated income tax, shifts the tax burden to the lower and middle classes, and transfers massive amounts of money to the richest 1% of all Americans, all in the deceptive guise of a wonderful “tax cut.” Let’s get this straight. Under Franklin D. Roosevelt a national old age pension fund called Social Security was set up and a specific payroll deduction was established to pay for it. But now the government has used the pension fund to pay for its operating costs and says it no longer has the money to pay retirement benefits...yet Bush has just passed a massive tax cut, 42.5% of which went to the richest 1% of all Americans. Can you imagine if a union were to use its pension fund to cover the operating costs of the union, then use the operating fund to give out a massive payback, 42.5% of which went to the president and his cronies in the top 1% of the union, and then tell the rest of the membership that, sorry, there was no money left in the pension fund for their retirement? That’s called racketeering, and any union leadership that did that would be up on federal charges faster than you could say F.B.I. Nevertheless, Bush has just done exactly that with Social Security, the only old age pension I’ve got, and he’s getting away with it! Now that I’ve read between the lines I understand what has happened. Under the Clinton administration my only old age pension, Social Security, was well on its way to being secure and good as gold for me when I retire. With his recent tax cut, Bush has just cashed in that pension fund, into which I have been paying for over 30 years, given 42.5% of the money to his cronies, the richest 1% of all Americans, and sent me a lousy check for $47.75. | ||
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