May 18 2005
Gov. Doyle in Milwaukee Today
Just thought I’d pass this along in case anyone is interested in attending..
Governor Jim Doyle will discuss the effects of President George W. Bush’s plan to privatize Social Security at 1:30 p.m. Wednesday, May 18, 2005 at the Washington Park Senior Center in Milwaukee.
On Thursday, President Bush is scheduled to be in Milwaukee to tout his privatization plan of Social Security. The Governor will discuss the significant impacts his plan could have on Wisconsin families.
The Washington Park Senior Center is on 45th and Vliet, about 10 blocks from my house, so I think I’ll stop by. If anyone is interested in more information drop me a line with the link at the right…
I just got back from the Governor’s talk at the senior center and wanted to give a few details for the folks who couldn’t make it…
There was a short speech by the Gov. basically covering some of the reasons that social security privatization is a bad idea, but the majority of what he talked about was the negative impact changes to social security would have on Wisconsin seniors, our ‘Badgercare’ program, and how Medicare/Medicaid costs are a huge drain on the State budget.
He challenged the President to talk with ‘real’ Wisconsin seniors while he’s here tomorrow pitching his social security plan.
He then handed the podium over to a Professor whose name who I didn’t catch. He told the story of how his father passed away back in the 50’s, and if it weren’t for social security’s survivor benefits, he, his mother, and his 5 siblings would not have been able to make ends meet. Although I saw he had cards prepared, he never referenced them, and basically gave the 10 minute talk about his situation from his personal experience and memories.
Gov. Doyle then took some questions from the 35 or so people who were there, many of them residents of the senior center about Pres. Bush’s privatizations plans, and how it would affect them.
The highlight, for me at least, of the afternoon was when Mike Miller from channel 12 asked the Governor how he would respond to Pres. Bush saying that the risk involved with privatization would be marginalized by investing in bonds and treasury bills to which the Gov. quickly replied that social security funds are already invested in T-Bills, so whats the point of the Presidents plan?
He also added that the Presidents plan has been a moving target that has moved to smaller and smaller percentages of payroll taxes going to privatization as the Presidents approval ratings on the issue have gotten smaller and smaller as well.
Hard to translate the effectiveness with which the Gov. totally shot down one of the primary arguments for privatization, and everyone there got a laugh out of it.
Total time was about 40 minutes, and the Governor really chose a few key points to talk about and hit them well in my opinion.
Unbelievable. Clearly Doyle doesn’t know the difference between the SS IOUs and actual T-bonds. According to Steve Forbes and other leading economists, the SS IOUs are “non-marketable bonds”. They are totally different from bonds on the open market held by the public that are actual securities. The IOU bonds are called “special-issue T-bonds” because have no assets behind them. When they become due, taxes will have to be raised to pay for them.
Doyle’s other lie:
“He told the story of how his father passed away back in the 50’s, and if it weren’t for social security’s survivor benefits, he, his mother, and his 5 siblings would not have been able to make ends meet.”
Oh please. Both Bush’s and Ryan’s plans (and all other reform plans I’ve read) make it clear that survivors’ benefits would remain just the way they are under current law.
Hasn’t Doyle ever heard Ryan talk about how his dad died when he was 16 and how to this day he’s thankful for the SS survivors’ benefits he got that put him through college — and that’s why he made sure his bill would keep the survivors’ and disability benefits intact?
First off jennifer, congrats on getting your lobbying organizations views published twice (1, 2)in the Kenosha Times this year.
As for the survivor benefits, I don’t think I follow you there. If a 40 year old man with a wife and two kids dies suddenly, Social Security will pay 70% - 80% of his benefits (nearly $2,000 a month).
I don’t know which details of the plan of Bush’s or Ryan’s you’re talking about, because Paul Ryans SS plan is so unspecific I couldn’t distinguish it from how social security currently works (with the exception of private accounts).
However, what if that same 40 year old man only had $50,000 in his private retirement account when he suddenly died? Is that all his famiy would get in benefits, or would they get that plus the benefits he gets now under current the current social security program? If he gets both, where are you going to get the money for that, and if he gets just his ‘nest egg’ will that be enough to pull his family through.
What a lot of people, including those at ‘Freedom Works’ seem to forget is that Social Security isn’t a speculation or a nest egg investment. It’s a guaranteed social benefit. The fact that the stock markets notorious crashing of the late 20s and the depression that ensued is one of the primary reasons social security was created shouldn’t be lost on anyone.
And how is the quote from Doyle above a lie? If it weren’t for social security’s survivor benefits, his family wouldn’t have been able to make ends meet.
J Trapp
I think you’re kidding yourself if you think most people actually look at what is being proposed. If they did, most people wouldn’t have an issue with the proposal. I don’t think the democrats that have actually read the bill even have a problem with it - they are just playing politics and since it’s not their idea, they are not going to pass the legislation.
You are absolutely correct on Doyle’s assessment of T-bills. One way to look at it (I’m can’t find the article I read about this, so I’m goign to paraphrase) is this — SS IOUs are like you borrowing $50 from yourself and then at some point needing to pay yourself back. Doesn’t make much sense, right? Exactly. Actual T-bills are an agreement between two separate parties - example would be me borrowing $50 from Dan.
Hasn’t Doyle ever heard Ryan talk about …
Right … you see J Trapp, most people don’t look at both sides of an issue. They just listen to people that agree with them, so they get reinforced ideas of the issue. It’s not that dissimilar than Dan going to listen to Doyle speak of SS reform. Why even go? Dan knows what Doyle is going to say … the same thing Dan has already read and believes. What we all should do is listen to the dissenting/opposite opinion to understand the issue.
First off jennifer, congrats on getting your lobbying organizations views published twice (1, 2)in the Kenosha Times this year.
Are you trying to tell us something about J Trapp’s perspective? Or is this truly a congrats?
I couldn’t distinguish it from how social security currently works (with the exception of private accounts)
Exactly. But in the next breath you say how there won’t be any survivor benefits, etc.? hmm.
It’s a guaranteed social benefit
Dan - if we don’t fix it - there won’t be any “guarantee” for us!! :(
Hi Dan,
“And how is the quote from Doyle above a lie? If it weren’t for social security’s survivor benefits, his family wouldn’t have been able to make ends meet.”
Sorry Dan, I did use the wrong word. “Lie” was not specifically correct word to use in that instance. I should have said “grossly mislead”. The professor’s story about how glad he was to have received his survivor’s benefits was related because the direct inference was that under the GOP Social Security reform plans, survivors would no longer receive those benefits. Ryan feels very passionately about keeping those benefits intact because as I said, his dad died when he was only 16 and those SS benefits helped put him through college.
It is just plain flat out WRONG that survivors’ and disability benefits would disappear under SS reform with PRAs. All the SS reform plans I’m familiar with keep ALL survivors’ and disability benefits intact, just the way they are under current law. Period. Anyone who tries to say or imply otherwise is lying for political purposes. This issue is too important for political gamesmanship.
Paul Ryans SS plan is so unspecific
Dan, have you read the bill? Short of that, have you read everything here (link below)?
http://www.house.gov/ryan/Saving_Social_Security.htm
“However, what if that same 40 year old man only had $50,000 in his private retirement account when he suddenly died? Is that all his famiy would get in benefits, or would they get that plus the benefits he gets now under current the current social security program? If he gets both, where are you going to get the money for that…”
Under Ryan’s and Bush’s plans, this man’s family would get both – that is they would get their dad’s nest egg PLUS survivors’ benefits. The money for disability and survivors’ benefits would come from the 6% of FICA taxes (Ryan’s plan; more under Bush’s plan) that would continue to be paid into the SS program. Ryan’s plan allows for people to invest about half of their SS taxes into PRAs, while the president’s plan allows people to put a far smaller percentage into their personal accounts. Under either plan, the bulk of workers’ SS taxes would still go into the traditional account. That money would cover not only disability and survivors’ benefits , but would also provide a safety net - that is for those who would choose not to participate in a PRA or for those who did, in the unlikely event their PRA tanked.
“What a lot of people, including those at ‘Freedom Works’ seem to forget is that Social Security isn’t a speculation or a nest egg investment. It’s a guaranteed social benefit.”
Right – it’s been there for everyone, rich and poor alike. But also don’t forget that it was designed so that the more people pay in to the system, the higher their benefits. Unfortunately, as Yeah Boy says, there won’t be any guarantee for anyone unless we fix the system.
Dan, I notice you didn’t argue with my explanation of the stark difference between the special-issue T-notes (the worthless Social Security IOUs ) and regular Treasury notes that are sold on the open market. It’s vital that people understand this difference because herein lies the crucial reason that Social Security is heading for insolvency, to the tune of nearly $12 trillion. The other reason of course that the system can’t maintain itself is population demographics. Once the general public understands these problems – and their magnitude - they will come around to realizing we need to do something to save Social Security – and do it soon. Every year that we do nothing the system goes another $600 billion into debt.
Theres a lot to hit, but I just wanted to talk about the $600 billion/year number being tossed about. When Bush said it will cost us $600 billion/year if we do nothing, and that’s totally incorrect according the the trustees of the social security program and their annual report.
I did read Rep. Ryan’s plan actually, and it is light on numbers and big on promises. To finance the accounts while continuing to pay benefits to current retirees would require huge levels of borrowing, if I’m reading Ryan’s case correctly, that means borrowing comes against the surplus social security currently has projected untill 2017. However, that money is currently being used to fund other projects (and thats another discussion), and it’s doubtful the supporters of those projects would approve of their money disappearing.
As for the Presidents plan, he doesn’t even have such a stipulation on how he plans on paying for the transition to private accounts. If you start siphoning off 2-5% of the payroll tax that is currently (barely) funding SS into something else, there’s even less money to go into the system, and it would have to start cutting benefits even faster than before.
About the Bush plan fixing the problem, it still doesn’t. Even his ‘new’ plan unveiled a few weeks ago still doesn’t solve the solvency problem. And here I thought he was trying to accomplish solvency but his plan doesn’t achieve it.
About the T-Bill issue, I didn’t mean to gloss it over, but T-Bills aren’t worthless IOU’s, and when the President suggests that they are, he’s discrediting the entire treasury system and the government.
U.S. Treasury bills are generally regarded as the safest investment on earth, and suggesting the government is going to default on them is ridiculous and worrying. Right now, the social security trust fund is valued at $1.5 trillion and is expected to grow to $5.3 trillion by 2018.
The analogy above of “borrowing $50 from yourself and then at some point needing to pay yourself back” is a great one, although you don’t think it’s practical. In fact, you do this (I’d guess) on a daily basis by using a credit card, buying a car on credit, or getting a mor-tgage.
A company is giving you $100,000 of your future earnings to buy a house with, which at some point in the future, you’ll need to pay back to yourself with interest going to the company. That’s not totally different than the government giving itself $10billion today to pay for something, and again, happens every day because we run at a defeceit.
Not that I think defeceits are a good idea, but the government has been borrowing billions of dollars a day to keep itself running, why are you just starting to have a problem with that now?
Sorry for the short responses, I’m a bit short on time these past few days :)
“When Bush said it will cost us $600 billion/year if we do nothing, and that’s totally incorrect according the the trustees of the social security program and their annual report.”
Hi Dan – that number ($600 billion every year we wait) is from the SS trustees.
“To finance the accounts while continuing to pay benefits to current retirees would require huge levels of borrowing, if I’m reading Ryan’s case correctly, that means borrowing comes against the surplus social security currently has projected untill 2017.”
Ryan estimates the transition cost to be about $2 trillion. The highest estimate I’ve heard is from Ron Kind – he puts the estimate for transition costs at $4 trillion. Whichever number one uses, it would be a good deal to borrow either $2 or $4 trillion in order to wipe out a $12 trillion SS debt. It would be like someone paying $500 to refinance a home loan, exchanging a 9% rate for a 4% rate. The $500 would be WELL SPENT.
“However, that money is currently being used to fund other projects (and thats another discussion…”
Yup, you’re right on that one! I don’t know anyone from either party who professes to love the fact that Congress has been raiding SS since 1964 when LBJ removed the wall that originally protected SS funds. The raid on SS has been Paul Ryan’s MAIN issue since 1998 when he was first elected – he ran heavily on that issue.
One of Ryan’s first bills was the Social Security lockbox. It breezed through the House May 26, 1999. The bill then proceeded to the Senate where the Democrats killed it six times with filibusters. Senators Feingold and Kohl supported all six of those filibusters:
April 22, 1999, Roll Call 90
April 30, 1999, Roll Call 96
June 15, 1999, Roll Call 166
June 16, 1999, Roll Call 170
July 16, 1999, Roll Call 211
July 29, 1999, Roll Call 227
Anyone can verify these roll call votes at http://thomas.loc.gov/.
Feingold was asked at his March 7 listening session in Cudahy why he filibustered the lock box. Feingold’s terse response: “That filibuster (as if there had been only one) had to do with other issues.” (I was there.) The questioner wasn’t allowed a follow-up, but he surely would have asked what those “other issues” were. Feingold’s answer would have been fascinating because there were no extraneous issues associated with that bill. The bill simply walled off Social Security so that it could no longer be spent on other programs. Each vote was either for or against the Social Security lockbox. Again, all easily verified.
Ryan has been trying to stop the raid on Social Security since 1998. He’s still trying. One of the ways Ryan’s bill pays for transition costs is by stipulating Congress would be forced to stop the raid on Social Security.
Let me repeat that! One of the ways Ryan’s bill pays for transition costs is by stipulating Congress would be forced to stop the raid on Social Security. I never see this mentioned in any press stories. I’ll bet if we asked American voters: “Should we or should we not make it law the Congress is no longer allowed to spend our Social Security taxes on other programs?” … that the answer would be in the range of 90% + in favor of the lockbox. Why do the Democrats keep blocking the lockbox? Answer – I don’t know other than they want to keep spending those dollars.
The lockbox (call it anything you want) is one of the main ways Ryan-Sununu pays for the transition costs to get through the time period when we are still obligated to pay all SS benefits to anyone who is now 55 or older. After that, assuming most people would opt for personal accounts, every dollar that people put into their PRA would be dollar for dollar that much LESS that the SS system would have to pay out in benefits. THAT is how solvency would be achieved.
Time and again I hear Democrats talking about “diverting dollars” from SS. Think about it. “Divert” is not the right word because it implies those dollars are somehow lost from the system. The opposite is true. Every dollar that people choose to put into a personal account is one dollar LESS the system is obligated to pay out in benefits. In other words, all those personal account dollars let the SS program OFF THE HOOK, dollar for dollar.
Once again: http://www.house.gov/ryan/Saving_Social_Security.htm
“U.S. Treasury bills are generally regarded as the safest investment on earth, and suggesting the government is going to default on them is ridiculous and worrying.”
Again, yes, REGULAR T-bills ARE among the safest investments on earth (which by the way is why both the Bush and Ryan bills allow and encourage people to put their PRAs into T-bills). But as I said before, the T-bills in that drawer in Virginia are called “special-issue T-bonds” because they are NOT THE SAME as those bonds that are publicly traded on the open market. These special-issue bills are simply pieces of paper that say the U.S. government general fund owes X amount to the SS fund. And of course as we all know, the government does NOT HAVE THE MONEY to make those notes good since the SS fund has been raided since 1964. The ONLY way they’ll be able to pay those notes when the notes come due is by raising our taxes. THERE IS ONLY ONE SOURCE OF REVENUE FOR GOVERNMENT AND THAT IS TAX REVENUE. Government can’t get a second job, the way we can if we borrow more money than we should against a credit card (to use your analogy). The only way government can raise more money is by raising taxes.
“I did read Rep. Ryan’s plan actually, and it is light on numbers”
Ryan doesn’t have all the numbers posted online – and by that I mean the VOLUMES of charts and actuarial tables I’ve seen in his office. Believe me, he has more charts and tables than you can imagine. Do not forget that the SS ACTUARIES HAVE SCORED HIS PLAN THREE TIMES. We’re not talking about some “fly-by-night” plan here! If you’ve met Ryan, you know he is one of the brightest minds in Congress and he is totally sincere.
I would suggest you call his office and arrange to meet with Congressman Ryan. You will see that his first and foremost wish is to save Social Security. Clearly he is spending a lot of political capital on this issue – the dreaded “third rail of politics”. But he’s doing it because he can’t in good conscience sit back and let the system go down the tubes.
Trust me, Dan. I am admittedly a Republican, but I don’t take all Republican plans at face value. I feel very strongly about reforming SS because I don’t want to see my two grandchildren getting a negative return on their FICA taxes – nor do I want the see their taxes raised or the retirement age raised. Those will be our only options if we don’t take off our partisan blinders and give some serious consideration to personal accounts. The reform plans will not affect me since I’m over 55. But how I wish I could participate in the plan!!!
Bush can’t run for president again, so why do you think he’s pushing for SS reform? A second term president usually does whatever he does for legacy purposes. Bush knows (as do Democrats in their hearts) that SS is in deep trouble. President Bush truly wants to save Social Security –and yes, get credit for it. It’s really as simple as that!