AFL-CIO moves on Social Security

By Fred Gaboury

Debra Dion says the AFL-CIO "is not waiting" to hear what President Clinton says or doesn't say about Social Security in his State of the Union address.

"We have our own program and we're going ahead with it," Dion, an AFL-CIO spokesperson, told the World. "We're organizing 60 'community summits' next month as part of our continuing effort to involve working families in a campaign to protect and strengthen Social Security."

She said the labor federation and its allies are convening these meetings during the Feb. 12-22 congressional recess.

In a memorandum announcing the campaign, AFL-CIO President John J. Sweeney said the meetings would concentrate on educating participants on the stakes involved in the Social Security wars, exposing the forces behind the drive to privatize the system and developing "Social Security Action Teams." Sweeney said the teams would provide a nationwide structure through which to organize campaign activities and for future action in defense of the system.

A policy statement adopted by the AFL-CIO Executive Council last August rejects any "reforms" that lower benefits or increase retirement age or alter the formula under which workers with low earnings for Social Security purposes receive a larger proportion of their pre-retirement income than do retirees who enjoyed higher earnings.

While rejecting any idea that Social Security faces a crisis requiring drastic "reforms," the statement says the system faces "serious but modest" long-run financial challenges that can be met with what the AFL-CIO calls "modest fixes" that could include:

* Using the budget surplus for Social Security purposes rather than "squandering" it on more tax cuts "for the people who need them least."

* Taxing earnings above the current cap of $72,600 in order to make the Social Security tax more progressive and to help meet any shortfall in funding for the system.

* Change the "investment mix" of the Social Security Trust funds - now nearly $800 billion - by investing a portion of the surplus in the stock market.

* Change the taxation of Social Security retirement benefits to bring them into line with the taxation of private pensions while, at the same time, protecting the benefits of the neediest Social Security recipients.

Oliver Montgomery is adamant that there is no crisis requiring major "fixes" to the system.

International director of SOAR, the retirees organization of the Steelworkers Union, Montgomery told the World the only crisis facing the system comes from "those who would destroy" our nation's most successful social program."

Montgomery said that investment of any portion of Social Security funds in the stock market was a foot in the door for those who would "eventually destroy the system by setting up individual retirement accounts. "Instead," he said, "let's raise the income cap and tax unearned income so we can catch guys like Bill Gates and Ross Perot."

Montgomery said his other concern was that Clinton would cave in when it comes to opening the trust funds to the tender mercies of Wall Street. "He's under a lot of pressure and has folded before."

Dan Shulder, public affairs director for the National Council of Senior Citizens, said the council worried about where things may go because of the stress of "impeachment politics."

Shulder, too, rejects any idea of a Social Security crisis. "The system is secure, financially sound and has never missed a check. So why bring the roulette of the stock market into a situation where millions of people are already uncertain and insecure?"

Shulder said the council supports raising the cap on taxable earnings to the level of the $137,000 annual salary paid members of Congress. "And what about including unearned income - that's the best way to get at the rich and super rich. After all, the Social Security tax, with a flat rate and a cap, is the most regressive tax we have."

Lisa Davis, senior policy analyst for the National Committee to Defend Medicare and Social Security, is also concerned about the role of the White House as Social Security moves front and center in the public debate. For her, the greatest danger facing the 145 million workers covered by Social Security is the president's "seeming enchantment with individual retirement accounts."

"You don't get major change in this country without a crisis, real or imagined. Several years ago outfits like the CATO Institute set out to create a crisis and they've done a pretty good job," she said. "Remember, it took the crisis of the 1930s to win Social Security in the first place."

Although none we talked to are yet declaring victory, Shulder spoke for all when he said, "Wall Street is in for a tough fight on this one. If we keep it up, we can beat them!"