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Congresswoman Jan Schakowsky, Ninth District, IL
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Press Release 
AUGUST 22, 2001
 
SCHAKOWSKY ADDRESSES AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES UNION 
IN CHICAGO

WARNS AGAINST ATTACK ON SOCIAL SECURITY

 
CHICAGO, IL -- Thank you for inviting me to be here today to talk with you.  I want to thank AFGE and your president Bobby Harnage for your great efforts to protect the rights of federal employees and the quality of federal services.  I especially want to thank all of you who work so hard – under some difficult circumstances – to make Social Security the tremendous success that it has been.  Just think for a moment about what Social Security has meant for our country.

Without Social Security, 48% of all senior citizens would be living in poverty.  Today, less than 10 percent are poor. And you know as well as I that Social Security is a family program – not just a retirement program.  Disabled workers, spouses, and dependents rely on the lifeline that Social Security provides.  In fact, Social Security keeps 1.1 million children out of poverty.

We should be celebrating the success of Social Security but, instead, we are facing an attack unlike anything we have seen.  For years, privatizers have felt safe attacking the federal government and federal workers.  But they never felt safe attacking Social Security.  Social Security was seen as a sacred trust.  It was never to be attacked publicly – although stealth attacks like cutting the Social Security workforce in third were fair game.  That has changed.

In June, I went to the World Trade Center in New York City.  Treasury Secretary Paul O’Neill – the same guy who wants to eliminate the corporate income tax and who believes that “able-bodied” people have a responsibility to save for their own retirement and health care needs – was meeting with Wall Street executives at Windows on the World.  Treasury Secretary  O’Neill – a federal employee (although hopefully a temporary worker) – was helping those executives raise money and plot a $20 million campaign to privatize Social Security.

Today, just as we are meeting here in Chicago, the Bush-appointed Social Security Commission is meeting in Washington, including half a day of closed-door meetings not open to the public.  

In the words of White House spokesperson Ari Fleischer, the members of the commission were chosen because they “share the President’s view that personal retirement accounts are the way to save Social Security.”  No other side of the debate is included: not seniors, not persons with disabilities, not AFGE Local 1395 members who know how Social Security really works.

This Commission is a stacked deck and you can bet that when it issues its final recommendations this fall, it will be a bad deal for Social Security. 

Their interim report is a sign of what’s to come.  First, they argue that the Social Security Trust Fund is in imminent danger of going broke.  Yet, the most recent report of the Social Security Trustees found that Social Security is fully solvent through 2038 and can pay 72% of all benefits through the rest of the century.  In 2016, the “crisis” date targeted by the Commission, the Trust Fund will have over $5 trillion in reserves.  Social Security is not going bankrupt, it just needs a tune-up.  Privatization is a radical change that would drain $1 trillion from the Trust Fund over 10 years and force cuts in future benefits by up to 54%.

Second, they argue that Treasury bonds are worthless assets.  Nonsense.  Treasury bonds are the most secure investment in the world – the U.S. Treasury has never failed to make a payment.  

Third, they argue that women don’t benefit.  Nonsense again.  Social Security provides a progressive benefit – adjusted for inflation and guaranteed not to run out – that helps compensate women for lower wages and time out of the work force. Without Social Security, over half of all women 65 and older would be poor.  

Fourth, they argue that African-Americans don’t benefit because they don’t live as long, but they conveniently forget about the facts: the importance of survivors’ and disability benefits (20% of African American beneficiaries are children, 17% receive disability payments) and the fact that African-Americans also benefit from the progressive nature of Social Security benefits.

What they don’t talk about is how Social Security offers benefits and protections that no private investment program can provide.  They don’t talk about how Social Security spends less than one percent of revenues for administration and that privatized systems, like Great Britain’s, spend up to 38% of revenues on administration.  They don’t talk about how they are going to administer the current program – which will continue even if benefits are cut – and administer 145 million individual accounts.  

They also don’t talk about how the Bush tax cut -- $1.7 trillion mostly for the wealthy – is already eating into the Medicare Trust Fund and, if you ignore their accounting gimmicks – the Social Security Trust Fund.  The non-Social Security surplus is gone.  Now the Bush Administration, which is trying to scare the American public into believing that Social Security is falling apart, is raiding Social Security to pay for tax breaks for the wealthy.

You and I don’t buy that argument and I believe that the American public doesn’t either.  This fall, I am introducing legislation that will delay additional tax cuts that benefit the wealthy until we have protected Social Security and Medicare, added a comprehensive drug benefit, funded education, and addressed our housing crisis.  We must put Social Security and other critical family needs first.

When Congress reconvenes next month, we will be dealing with the budget for next year and priorities for years to come.  One alternative is that we keep to the Bush path: privatize government services and contract out, cut Social Security benefits and domestic spending, and reward the rich with tax cuts that they don’t need.  The other alternative is that we put first things first: recognize the importance of federal workers and the need for a government role in meeting critical needs, protect Social Security, and address the needs of the many before giving tax breaks to the wealthiest few.  

All of us have a tremendous stake in which path we take. I will fight hard, working with colleagues like Danny Davis, to make sure that we take the right one.

 
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