North America
America - Andrew Stephen fears for FDR's welfare legacy
Published 24 January 2005
Just as Bush and his team marshalled facts and factoids of doubtful provenance to justify invading Iraq, so they are now doing the same to justify privatising social security
You always know something dodgy is going on when Dick Cheney, the vice-president, is wheeled out to argue for some policy or other. The ploy works, too: he convinced a majority of Americans not only of the existence of WMDs in Iraq, but also that there were established ties between Saddam Hussein and al-Qaeda, and a majority of Fox News viewers still believe both to be the case. He has perfected the art of appearing to be one of an exclusive band of grown-ups, who knows what is what, speaking out of his lopsided mouth with apparent authority and sincerity.
Now he is busy again. The great dream of the second Bush term is not so much to bomb Iran - though I gather that is firmly on the agenda - but, in Bush's grandiloquent words, to "transform social security". Having brought democracy to the Middle East and transformed the world by invading Iraq during its first term, the mighty Bush administration will now transform semi-socialist America into a paradise in which old folk eagerly scan the stocks and shares pages of newspapers every day and thereby magically increase their old-age pensions to millions, billions, or even trillions a week.
The world will be their oyster, freedom knowing no bounds.
It does not matter how in touch with reality these dreams are, or even whether the facts justify changing tried-and-tested policies: these are the ways by which Bush and his band of facilitators will earn their place in history, having had the courage to take decisive, even revolutionary, decisions.
The Iraq project is coming on nicely, the Bush team tell themselves. Now it is time to set about a similarly bold transformation in the domestic arena, this time by privatising part of the social security system introduced by Franklin D Roosevelt way back in 1935.
We are now, as a result, seeing exactly the same sort of campaign that presaged the invasion of Iraq. Facts and factoids, many of doubtful provenance, are being marshalled to create a world that does not exist - but which needs to exist if the Bush dream policies are to be justified. In a leaked memo, Peter Wehner - the White House's director of strategic initiatives and a protege of Karl Rove - advised the administration that, for the policies on social security to be accepted, the public had to be convinced that "the current system is heading for an iceberg".
So now there is another "war room" to convince the public that changing social security is vital. A $40m (£21m) public relations blitz is under way, with ads trying to portray Bush as a great transforming visionary like FDR himself - much to the disgust of James Roosevelt Jr, FDR's grandson, who has asked, fruitlessly, that his grandfather's picture not be used in the ads. Cheney is grown-upping his way left, right, and centre. Bush is holding what PR people call "town-hall meetings", whereby he appears to be talking to ordinary people about their pension concerns. He is sticking resolutely to his message, too: he repeats, over and over again, that the social security system is "bankrupt" or "flat broke".
The basis of the Bush team's argument is that, untouched, the system cannot withstand the imminent flood of baby boomers into the ranks of old-age pensioners. They inform us of the dire news that in 2018, for the first time, social security will start paying out more than it is taking in; the Washington Post obediently describes this date as "the day of reckoning". In fact, the system has run at a deficit for 14 of the past 47 years. Projections in this field are notoriously unreliable, but nobody disputes that the system will still be operating in the black as far ahead as 2042, and, perhaps, 2052. These facts do not matter when an ideological cause is waiting to be implemented: "First step is to make sure everybody knows we have a crisis," says President Bush.
Amid this onslaught, few have pointed out that there is no reason why privatising part of the system would make it more economically resilient. The reverse is likely to be the case; changing even partially to privatisation, at least for the next 45 years and possibly into the next century, would probably cost the country some $2trn (£1.1trn) more. Indeed, Wehner said in his confidential memo that if the system were to be privatised, only drastic cuts in benefits could then save it. But this has been conveniently blurred in the Bush-Cheney-Rove campaign: its first proposition is that the social security system is in danger of collapse, and to all but the very attentive the logical corollary then follows that only the Bush plan to privatise the system can save it.
Forty-seven million Americans currently receive social security cheques that average out to $14,000 (£7,450) a year each - 33 million of the recipients being old folk, seven million dependants of those who have died, and seven million disabled people and their dependants.
The annual cost of this is $488bn (£260bn), compared with $300bn for Medicare and $162bn for Medicaid - both of which are in need of rescue. Up to a ceiling of $90,000 (£48,000) annual income, employees pay 6.2 per cent of their income to the social security trust fund - and employers add 6.2 per cent themselves. How much of this Bush wants to turn over to private investment is unclear, but 30 per cent is believed to be the target, though the more wild Republicans, such as Newt Gingrich, say it should be even more.
I never cease to be astonished at how Bush, against all available evidence, believes himself to be a truly great president who will show his greatness by making a lasting change to both the country and the world. I suspect his yen to invade Iraq began when he realised his father had failed to get rid of Saddam Hussein in the first Gulf war; then it was all neatly rationalised and packaged for him as an ideological issue by the wildly zealous and out-of-touch neo-cons.
Now it is the turn of the precious social security system that FDR introduced when there was 20 per cent unemployment, and after private arrangements for pensions had disastrously failed to work for the millions who were destitute. The notion that changing social security would be one of Bush's vehicles of greatness began and developed into another ideological issue when he was governor of Texas; the story was told then that the caretaker of a court building in Galveston had made no less than $750m (£400m) from dabbling in stocks and shares.
Eureka! That was it. Bush devours sentimental (and probably untrue) stories which show how a humble citizen can pull himself up by his boot straps and make good - just like he did.
It's what free-market America, where even a humble caretaker can soar into the heavens if he is not trammelled by petty government restrictions, is all about. Freedom. He has given it to the people of Iraq, and now he is giving it to his own people, too.
And Dick Cheney, speaking out of the side of his mouth, is right behind him in this unstoppable crusade towards historic, presidential greatness.
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