First Term: Bush Created A Social Security Commission To Draft A Plan To Establish Private Accounts

In Early 2001, Bush Appointed A “Bipartisan” Commission To Draft A Proposal. According to the Baltimore Sun, “President Bush will appoint a Social Security reform commission today that is touted as bipartisan but is also stacked with scholars and former lawmakers who largely share his view that the retirement program should be partially privatized. The 16-member commission – eight Republicans and eight Democrats – is being asked to draft a plan to overhaul Social Security and present it to Bush in the fall, a senior administration official said. White House spokesman Ari Fleischer said the panel would be comprised of ‘people who are committed to the president’s ideas.’ ‘Of course, he is putting together a commission that believes in what he believes in,’ Fleischer said.” [Baltimore Sun, 5/2/01]

President Bush’s Commission Announcement: “Social Security Reform Must Offer Personal Savings Accounts To Younger Workers Who Want Them.” According to a transcript, at his announcement of the President’s Commission to Strengthen Social Security, President Bush said, “Two months ago, in my address to Congress, I described the principles that must guide any reform of Social Security. First, Social Security reform must preserve the benefits of all current retirees and those nearing retirement. Second, Social Security reform must return the Social Security system to sound financial footing. Third, Social Security reform must offer personal savings accounts to younger workers who want them. Today, young workers who pay into Social Security might as well be saving their money in their mattresses. That’s how low the return is on their contributions. And the return will only decline further — maybe even below zero — if we do not proceed with reform. Personal savings accounts will transform Social Security from a government IOU into personal property and real assets; property that workers will own in their own names and that they can pass along to their children. Ownership, independence, access to wealth should not be the privilege of a few. They’re the hope of every American, and we must make them the foundation of Social Security. Today, I am naming a Presidential Commission to turn these principles into concrete reforms.” [Bush Remarks, 5/2/01]

Critics Viewed The Commission “A Stacked Deck.” According to the Baltimore Sun, “But Democratic leaders complained that expected members seemed to be selected to achieve a pre-ordained result – backing Bush’s campaign proposal to let younger Americans divert some of their payroll tax money into private investment accounts. ‘This is a stacked deck,’ said Senate Minority Leader Tom Daschle. ‘This is not an objective view of our options under Social Security. We don’t need another lobbyist group.’” [Baltimore Sun, 5/2/01]

Potential Commission Member Said He Was Asked “Whether He Would Agree In Advance To Recommend That Social Security Taxes Be Redirected Into Private Accounts.” According to the Baltimore Sun, “Bush aides considered naming current members of Congress to the commission but had some difficulty persuading Democrats to take part. One Democrat, who spoke on the condition he not be identified, said he had been asked whether he would be willing to serve against the wishes of his party leaders and whether he would agree in advance to recommend that Social Security taxes be redirected into private accounts. He declined.” [Baltimore Sun, 5/2/01]

Social Security Commission’s Charter Stated That “Payroll Taxes Must Not Be Increased” And Reform “Must Include… Personal Retirement Accounts.” According to the Charter of the President’s Commission to Strengthen Social Security, “Executive Order 13210 establishes the President’s Commission to Strengthen Social Security. The Commission will provide bipartisan recommendations to the President for modernizing and restoring fiscal soundness to the Social Security System according to the following principles: modernization must not change Social Security benefits for retirees or near retirees; the entire Social Security surplus must be dedicated to Social Security only; Social Security payroll taxes must not be increased; the Government must not invest Social Security funds in the stock market; modernization must preserve Social Security’s disability and survivors components; and modernization must include individually controlled, voluntary personal retirement accounts, which will augment the Social Security safety net.” [Charter of The 2001 President’s Commission to Strengthen Social Security, 5/21/01]

Social Security Commission’s Report Offered Three Proposals That Included Private Accounts And Benefit Cuts. According to Cox News Service, “A presidential commission finished its work on Social Security reform Tuesday and immediately touched off a major political battle. The Commission to Strengthen Social Security offered three proposals for personal investment accounts to bolster the nation’s retirement, disability and survivor’s benefit program. All three plans envision diverting part of the 12.4 percent payroll tax into personal investment accounts and reducing benefits accordingly. Two of the plans would further reduce benefits, either by changing the formula used to compute a retiree’s initial benefits or by adjusting for a retiree’s increased life expectancy.” [Cox News Service, 12/11/01]

Commission Acknowledged High Cost Of Reform, But “Did Not Suggest How To Pay For It.” According to the Washington Post, “At its final meeting before it goes out of business, the President’s Commission to Strengthen Social Security acknowledged for the first time that such a profound change in the nation’s retirement system would eventually cost at least $ 2 trillion, though it did not suggest how to pay for it. The panel also concluded that Social Security cannot be rescued from the financial precipice it will reach by the middle of the next decade without cutting benefits for retirees and disabled Americans, using money from elsewhere in the federal budget, or both.” [Washington Post, 12/12/01]

Social Security Commission Recommended Delay Before Pursuing Reforms. According to the Dallas Morning News, “Social Security reform is dead – at least until 2003. A presidential commission unanimously recommended Tuesday that a rescue plan for the nation’s retirement system – a top priority of President Bush’s just months ago – be delayed for at least a year. The 16-member bipartisan commission was supposed to draw up a blueprint for converting a portion of Social Security into private investment accounts. And the panel was charged with including a plan to plug an estimated $ 5 trillion shortfall facing Social Security by 2075. What changed? A national recession, the stock market correction, and the war on terrorism to name a few. With those developments in mind, the president asked the two co-chairmen of the President’s Commission to Strengthen Social Security for the delay.” [Dallas Morning News, 12/12/01]

Following Report, “Bush Let The Moment Pass Without Comment,” Leaving The Future Of Social Security Reform In Doubt. According to Congressional Quarterly Weekly, “When President Bush appointed a bipartisan commission in May to recommend ways to overhaul Social Security, he declared in a Rose Garden ceremony that it was time to modernize the program by adding personal savings accounts into the mix. ‘We can postpone action no longer,’ he said. ‘We must save Social Security, and we now have the opportunity to do so.’ When the commission released its long-awaited recommendations Dec. 11, Bush let the moment pass without comment. For lawmakers and groups who supported Bush’s call for action last spring, the commission’s report was a missed opportunity. They believe Bush had a narrow window of opportunity at the start of his presidency, with the federal government enjoying huge budget surpluses, to build support for an overhaul and get Congress to move on it. Now, they say, the economy has soured, the surpluses are gone and the ‘golden moment’ has passed. It is unlikely to come back until 2003 — if then.” [Congressional Quarterly Weekly, 12/14/01]