This article originally appeared in the Boston Globe on January 14, 2005.
If there's one voice conspicuously absent in the debate over replacing Social Security with private investment accounts, it is young people — the ones with the most to lose.
Young people don't typically share a strong interest in issues like Social Security — issues best discussed with two aspirin and a glass of water — but the absence of young voices is peculiar. Listen to any argument for privatization and one thing is clear — it's all in the name of young Americans.
In a recently leaked White House memorandum, a top aide to Karl Rove, Peter Wehner, outlined the president's initial plan to privatize Social Security. The memo ends with a warning to his conservative colleagues: It is their "responsibility" and "duty" to ensure that they "do not create an inter-generational conflict." Retaining strong ties between the generations, Wehner writes, is "a deeply conservative belief."
But, in fact, this administration's record reflects a deep disregard for the interests of young Americans.
Recently, new federal rules eliminated Pell Grants for nearly 90,000 students nationwide and cut financial aid for an additional 1.2 million students. This even as family incomes keep falling and school tuitions keep rising.
As for creating strong ties between generations, this administration has harnessed every American under the age of 30 to an enormous national debt — much of it accumulated in order to give tax breaks to the ultra-rich. And remember, young people are one of the largest and fastest-growing groups without health insurance. They will breathe dirtier air, inherit degraded public lands and national parks, and bear the burdens of our continued dependence on foreign oil — all thanks to policies advanced by this administration. And don't forget the Iraq war, where thousands of young people are fighting and dying far from their families.
Despite these policies, young Americans are susceptible to the privatization argument. Conservatives point to polls showing young workers are willing to consider an experiment with private accounts. Given the misleading scare campaign designed to convince young workers of a cataclysmic crisis, the polls aren't surprising.
Once you get past the hype and scare, though, Social Security privatization is an empty promise. The issue is complex, but young people trying to decide where they stand on it ought to remember three things.
First, the system is not in crisis. The amount of money needed to make Social Security solvent into the next century is less than what we're spending each year fighting in Iraq. That amount is equal to about 20 percent of the revenue lost each year because of the president's tax cuts. In other words, if we repeal some of the tax breaks given to the richest Americans since 2001, we could easily shore up Social Security.
Second, transitioning to private accounts will cost approximately $2 trillion without doing anything to improve Social Security's long-term finances. Since the government is already running a record deficit, that extra money must come from cutting federal spending, raising taxes, or borrowing more. There's little room to cut spending — unless they cut more programs like college aid. But after four years of slashing taxes, the president isn't likely to raise taxes for any reason. This leaves just one option: more borrowing and more debt for young Americans.
Worse still, Wehner's internal memo makes it clear that privatization won't solve the Social Security problem. In addition to trillions in transition costs, the president's plan will include drastic cuts in benefits for future retirees — today's young people. Without these cuts, he writes, "we'll face serious economic risks."
Third, with no changes to the current system, workers can expect higher benefits from Social Security than from a system of private investment accounts, according to a study by the nonpartisan Congressional Budget Office. That means today's twenty-somethings will be better off when they retire even if nothing is done to "fix" Social Security.
Private investment accounts are a tempting idea for young people, and conservatives know it. But just like much of this administration's ideological agenda, support for privatization rests on fear mongering, flawed economic assumptions, and a willingness to put faith in "the market" above facts and ahead of fiscal responsibility.
Wehner says standing up for young workers is a "deeply conservative belief," but judging by this administration's record, that's code for "politically expedient." There's nothing "conservative" about launching a preemptive war in Iraq based on false assertions and letting young Americans do the fighting and dying. There's nothing "conservative" about reducing aid to needy students hoping to attend college or vastly increasing the deficit in order to give tax breaks to the wealthy, sticking young people with the bill.
This administration has demonstrated over and over its willingness to put ideological purity, political loyalty, and the profits of its corporate patrons above the broad public interest. Why should young people believe that its risky Social Security privatization scheme would be any different?
Ben Hubbard is campus programs director at the Center for American Progress.