The Bush administration is stepping up the assault carried out under the Clinton administration, which eliminated Aid to Families With Dependent Children, with the Personal Responsibility and Work Opportunity Act in 1996. This was the first major reversal of any part of Social Security, which was a concession granted by the U.S. ruling class to the growing social battles by working people in the 1930s and expanded under the impact of the civil rights movement.

The federally-funded entitlement provides coverage for the disabled and their spouses and minor children, an old-age retirement income, benefits to minor children and spouses in case of death. Social Security is set up as a universal program, paying benefits to all regardless of income level.

The White House set up the 16-person commission early this year, drawing on politicians and business figures aligned to both the Democratic and Republican parties. Commission appointees all support the establishment of private investment accounts to provide retirement income, a plank in Bush's 2000 election campaign. The commission is expected to present its final proposals early next year.

Former Democratic senator Daniel Patrick Moynihan, who co-chairs the commission, told the media that they plan to restructure Social Security for the long term. "There will be some effects as things go up and down," he said in reference to the declining budget surplus and the prevailing economic uncertainty, "but we're trying to think in half-century terms."

AOL–Time Warner executive Richard Parsons, the panel's other co-chair, said that members of "minorities" wanted to use private accounts to improve their lot. The view of "African Americans and Hispanics" was, "Let us build wealth and get a stake in the American pie," he said. At the same time, he said that private accounts would not necessarily increase retirement incomes, admitting that "they could be greater, could be less, depending on the performance of the securities in which you invested."  
 
Discussion of benefit cuts
Parsons added that the panel was considering "benefit adjustments downward." He claimed that while no decision had been made, such cuts might be necessary to ensure the Social Security program's "stability."

The Wall Street Journal, an advocate of private accounts, cited a congressional study that concluded that "personal accounts could significantly offset the impact of cuts to standard payments that will be needed to maintain solvency.... If the system were left as it is," claimed the August 27 article, "the benefits would have to be cut by 32 percent" by 2020. Adding private accounts to the government benefit would allegedly produce "only" a 7.7 percent cut in total retirement income, the paper wrote. "Personal investment accounts would yield far bigger benefits for the well-to-do," wrote John McKinnon--that is, those with significant levels of surplus funds to invest.

The commission has picked up on themes of former presidential contender Ross Perot, who championed the idea of cutting Social Security benefits for the wealthy as a way of undercutting the program as a universal entitlement. Commission member Robert Pozen, vice chairman of Fidelity Investments, said he and others "feel strongly" that the system should be made "more progressive." This, in the words of the Journal, would be accomplished by wealthier individuals absorbing "a bigger share of the Social Security benefit cuts than others."

These proposals have attracted protests from unions, Black and women's organizations, and groups representing beneficiaries. Percil Stanford, of the National Committee to Preserve Social Security and Medicare, warned of the risks inherent in the proposal for private accounts. "Markets can and do stay down for long periods of time," he said. Union representatives and others staged protests outside a public hearing held by the commission in San Diego on September 6. Inside, a range of hand-picked speakers presented six hours of testimony.  
 
Aim to undermine public confidence
Opponents of Social Security claim that the system is rapidly going bankrupt, falsely presenting it as a discrete, separate entity within the government accounts, funded by payroll taxes and depleted by the growing army of the retired. In reality, Social Security is a government program, financed out of revenue like other items of expenditure.

As they prepare a deeper assault on Social Security, the Bush administration and Democrats in Congress parade as defenders of the program, claiming they won't dip into the "Social Security surplus" to counter the fall in government income. "Bush and [Democratic Senate Leader] Daschle Promise Not to Tap Social Security" read one New York Times headline.

"I've said that the only reason we should use Social Security funds is in case of an economic recession or war," said Bush on August 24, as growing joblessness and other evidence pointed to an economy on the brink of an official recession.

The Wall Street Journal expressed exasperation with this approach in an August 22 editorial advocating cuts to Social Security and Medicare programs. "Social Security [is] in surplus by about $157 billion this year," it reported. "Those extra payroll-tax dollars...go into the federal Treasury... Either the money is spent on other programs as Congress dictates, which is what politicians of both parties did for decades. Or it is used to pay down the federal debt."

What happens to this surplus, emphasized the editorial, has no effect on the government's obligation to "meet future Social Security or Medicare liabilities--that is, what the politicians have promised to pay taxpayers when they retire. Changing that would require reforming how those programs function: For example...by creating personal retirement accounts as part of Social Security that would let individuals build assets through the miracle of compound interest."  
 
 
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