Maine Politics

From the Piscataqua to the St. John

Sunday, July 03, 2005

Andrew Card in Maine (Continued)

One of the major tenets of the Bush privatization push has been the assertion that the Social Security trust fund is worthless. (It's not, it's full of U.S. Treasury bonds, which are the most secure monetary instruments in the world and are backed by the full faith and credit of this country) If you accept this premise, then all kinds of threats can be made about the immediate solvency of the program and the horrors of fewer workers paying into the system in years to come. The exact kinds of threats that Card was making in his speech.

When I asked why Bush was calling the trust fund worthless, Card assured me that the President had never said such a thing. I reminded him of the photo-op the President had conducted back in April at the Bureau of Public Debt in Parkersburg, West Virginia. Here's what a quick LEXIS/NEXIS search turns up from that trip:

"The President says the government has already spent the money you paid to fund your Social Security"
-KOAM-TV Pittsburgh

"The President visited the Bureau of Public Debt in Parkersburg. He saw the filing cabinet filled with debt slips. President Bush says those slips are all that's left and that Social Security will run out of money."
-WVPX-TV Cleveland

Using a government filing cabinet as a prop, President Bush on Tuesday played to fears that the Social Security Trust Fund is little more than a stack of worthless IOUs. [...]

"There is no trust fund, just IOUs that I saw firsthand, that future generations will pay," Bush said after inspecting the site.
-Knight Ridder Newspapers

"There is no trust fund," [Bush] said later in a speech at West Virginia University [...]

No one but an ignoramus expects there to be actual currency stored someplace for future Social Security payments. The government has used surplus payroll tax revenues for other purposes, replacing them with those Treasury securities.

When the time comes that the Social Security Administration needs to dip into the fund Bush says does not exist, it will redeem those bonds, the same as other investors in Treasuries -- like Japanese pension funds and the Chinese government -- will.

[...] the president of the United States implying that Treasury bonds represent empty promises is more than dishonest. It is an attempt to spread groundless fear.
- Lewiston Morning Tribune (Idaho) Editorial

The photo above is from the White House website. That's president Bush examining a three ring binder holding documents representing $1.7 trillion in U.S. Treasury bonds. I guess he was expecting giant piles of cash.

Card denied that any of the above ever happened. Then there was a bit of back and forth between us and Card eventually admitted that the fund was not worthless. So I asked him "Are you saying that President Bush was wrong to call the trust fund worthless?"
"I don't believe he said that."
"He did, but alright, how about this: if he did call the trust fund worthless IOUs, would he be wrong?"
"That's a hypothetical question and I'm not going to answer that."
(laughter from the room)

He's incredibly slimy, but I did get him to admit that the trust fund is fine and backed by the full weight of this government. Next time someone pro-privatization tells you about those "Social Security IOUs" feel free to tell them "That's not what Andrew Card says."

I've been informed by email that Clyde MacDonald, the man who demanded a dialogue at the Card event, once worked for Senator Mitchell. A quick look at the Mitchell Papers reveals that he once ran the Senator's Bangor office.

Here's a photo of MacDonald demanding some answers of Card. The kid in the orange tie behind him is an intern from Senator Collins' office. I talked to him for a bit but he couldn't give me any insight into the fence-sitting Senator's thoughts on Social Security.

There's one last thing I want to say about Card before I finish what has already become an incredibly long post. During his speech, the President's man said several times that we need to stop looking at Social Security solely as the "system" of Social Security and take a look at the wider idea of "social security" as a concept. I'm sure this is just another line which is meant to distract from the goal of strengthening the program and push privatization, but taken out of Card's context, it's an excellent idea. We should have a focus on things like making college affordable and health care accessible, the kind of things that help people to have a good life and a good retirement. No one should be trying to tear apart a safety-net that has worked well for the past 70 years.

Visit the new Maine Politics.


Treasury Bonds = Future federal taxes. They are only valuable if money is taken from the American people to pay the debt.  

Posted by George

7/04/2005 04:06:00 PM


You could say the same thing about U.S. savings bonds. Or dollar bills for that matter. 

Posted by Dan

7/04/2005 06:33:00 PM


Savings bonds, yes. Dollar bills, no. The value of dollar bills is based on how the market judges the strength of the U.S. economy.

The fact is for the bonds held by Social Security to be made good, taxes will have to be increased on future taxpayers or federal spending slashed. The money to pay the debt will have to come from somewhere.  

Posted by George

7/05/2005 04:39:00 PM


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10/10/2005 06:36:00 PM



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