Social Security accused of Bush propaganda

WASHINGTON – The Social Security Administration’s Web site and customer service lines are pushing the need to “modernize and reform” the retirement system, saying the future shortfall is “massive and growing,” and promoting personal investment accounts as a financial fix.

Critics say the agency is trying to scare people about the system’s finances and is improperly advocating President Bush’s political agenda for a Social Security overhaul to private accounts.

Sen. Frank Lautenberg, D-N.J., says that some messages on the agency’s toll-free customer service line played to people on hold, are “inappropriate political propaganda” paid for with taxpayer dollars and contain inaccurate information.

Lautenberg, in a letter sent Wednesday to Social Security Commissioner Jo Anne Barnhart, asked that the recorded messages be removed from the toll-free line.

But agency spokesman Jim Courtney said one message Lautenberg referred to was created and used during the Clinton administration. “We never changed it,” he said.

The recorded message says: “Did you know that the 76 million-strong baby boom generation will begin to retire in about 10 years? When that happens, changes will need to be made to Social Security – changes to make sure there’s enough money to continue paying full benefits. And most experts agree, the sooner those changes are made, the less they are going to cost.”

In about 13 years, the system is projected to start paying out more in benefits than it collects in benefits. Then, the government must start repaying the excess Social Security funds it already has spent. With the repaid funds, the system can cover full benefits until 2042, according to the forecast by Social Security’s Board of Trustees. The Congressional Budget Office predicted the system is in better shape and probably can pay full benefits a decade longer.

The Social Security Administration’s Web site, in a question-and-answer section about the system’s future, uses stronger language than the phone messages, calling the financing problems “very large and serious,” and the shortfall “massive and growing.”

Courtney said the Web site information is factual and “consistent with the annual report of the Social Security trustees.” He said the content was reviewed and approved by Social Security’s independent Office of the Actuary.

Social Security’s trustees say the system has a $3.7 trillion, 75-year shortfall. Bush says the financing is a crisis that Congress must tackle in a new session starting next month. Democrats have said the shortfall is “a manageable problem” that does not require an extensive renovation.

The American Federation of Government Employees union, which represents Social Security Administration workers, says the agency is trying to scare the public into supporting Bush’s plans.

“These tactics exploit the public’s trust in SSA, to convince the public that such reform must be necessary if SSA tells them it is,” said Dana Duggins, a union representative and SSA employee.

Bush wants to remake the system to let younger workers divert some of their payroll taxes in personal investment accounts, a top agenda for his second term. Since payroll taxes fund current retirees’ benefits, the government would have to spend $1 trillion to $2 trillion to replace those funds.

The agency’s Web site says that investment accounts are an option for the necessary “modernization and reform” of the system. It notes the expensive transition costs, but says:

“However, it is also true that if no changes are made, revenue transfers totaling $3.5 trillion, in today’s present-value dollars, would be needed to pay currently scheduled benefits over the next 75 years.”

Investment accounts alone do not fix the system’s financial shortfall, as the Web site implies. In exchange for an account, workers will get reduced benefits from the government, which would help shore up funding in later decades.

The Web site says the plan for investment accounts would be modeled after a “very popular plan” for government employees, the Thrift Savings Plan, which is similar to a 401(k) with “highly diversified, low-cost mutual funds.”

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