October 22, 2010

Social Security Privatization

Protecting Social Security has long been a priority for me and I have fought hard in the House to protect this vital program. I was stunned to read this week that former President Bush characterized his inability to privatize Social Security as one of his biggest regrets. You may recall that he made this a priority of his second term, calling for individual investment accounts that Americans could invest on their own.

We have been through tumultuous financial times, and the stock market has fluctuated so much over the past two years. I simply cannot believe that anyone, including President Bush, could really think that we should have taken Social Security funds and invested them in the stock market. So many people watched their retirement accounts diminish during the economic downturn. Social Security funds would not have been immune to this trend. This program is a safety net for millions of Americans and privatization would have dangerously undercut that protection. I will always fight with everything I have to shore up Social Security, it is one of the most important programs we have.

Social Security COLA

The House will reconvene on November 15th and one of the items on the agenda is a $250 payment to Social Security recipients. Earlier this month, we learned that there would be no cost of living adjustment (COLA) for Social Security recipients next year. Congress does not make yearly COLA decisions. Instead, it is based on the formula that the U.S. Bureau of Labor Statistics uses to calculate inflation. If inflation is low, as it has been, there is no COLA for the upcoming year. I tried, along with several of my colleagues, to bring this vote up before Congress adjourned in September. Many of us anticipated that no increase would be granted for next year and wanted to quickly address the concerns of recipients. The issue was not taken up last month, but it is expected to come up next month.

We recognize that those who depend on Social Security are struggling with increasing costs on a whole host of necessities, from food and housing to medicine. Those costs rise regardless of whether income rises with them. A little extra can go a long way, which is why an annual COLA is so important. I am very hopeful that the House can quickly pass this one time $250 payment to help offset the lack of a COLA next year.

TARP (A.K.A. the Bank Bailout)

Much has been said about the Troubled Asset Relief Program (TARP), which passed Congress and was signed by President Bush in October of 2008. It is often referred to as the "bailout bill" because federal funds went to banks so that they could stabilize their operations. As I am sure most of you know, I voted for TARP in 2008. Was it the perfect approach to address the growing economic crisis? No, but as I have often said, I've never been able to vote for my perfect bill. At the time I felt the risk of doing nothing to stabilize the economy was just too great. I was encouraged by this October 20th article which points out that the federal government has, in fact, made over $25 billion on $309 billion in TARP funds that were loaned out. Although not the only action taken to address the financial crisis, TARP investments are making money for taxpayers so far, and some financial institutions have already paid back their TARP funds. As TARP passes the two year mark, and begins to wind down, I thought it was important to share these figures with you.