Cramer Says Bush's Social Security Plan May Not Be the Way

FEBRUARY 23, 2005

Decatur Daily Logo

Cramer says Bush's Social Security plan may not be the way

By Holly Hollman
DAILY Staff Writer
hhollman@decaturdaily.com

ATHENS - U.S. Rep. Bud Cramer, D-Huntsville, isn't convinced the president's plan to create Social Security private accounts will fix the system.

"The way I understand the plan right now, it would take hundreds of millions, maybe even a trillion dollars, to front the newly designed program," Cramer said Tuesday, during a visit to Athens State University. "I don't think we can do that right now."

President Bush's plan would allow younger workers to invest part of their Social Security contributions in private accounts, while continuing the current system for those 55 and older.

Bush's reform proposal is in response to expected changes in the U.S. population that could leave the program paying more in benefits than it receives in payroll taxes by 2016, according to the Social Security Administration.

"I don't think the crisis is immediate," Cramer said, "but I'm not opposed to privatization. I just don't know if it's the way to fix the crisis that can happen."

Another concern Cramer has is lack of a safety net.

"I think they're trying to design a safety net, and there needs to be a safety net," Cramer said. "A younger person might get a better investment than Social Security. But if they hit 10 bad years in investing, then they're going to be looking at Congress and asking, 'Why didn't you design this better?' "

He has received hundreds of e-mails about Society Security and said it is the No. 1 issue among his constituents. From that communication, Cramer said he can tell Bush's plan is attractive to younger workers.

"They seem open to it, and even in support of it," Cramer said. "But for it to work for them, depends on how well you design it, and whether there is that safety net. I think many don't understand Bush's plan, and I don't understand all of it myself."

The administration says that holders of private accounts will be able to pass them on as an inheritance. But if the owners of private accounts don't reach a specified amount of money, then the government will buy them an annuity at retirement.

"It sounds like with this plan the annuity would die with them, but it's something I just don't know for sure yet," Cramer said.

Cramer said he is concerned that Wall Street has pushed for privatization so it can benefit from the promise of trillions in new money on which brokers can charge annual fees.

He said he doesn't want the "Merrill Lynches of the world" to reap the greatest benefit from privatization.

"I think self-interest is the motivation behind Wall Street's support of this," Cramer said. "The president has said it's not a gift to the financial community. That's something we've got to watch."

http://cramer.house.gov/HoR/AL05/News/Bud+In+the+News/2005/2-23-05+Cramer+says+Bushs+Social+Security+plan+may+not+be+the+way.htm