Obama Forgot Romney Wanted to Privatize Social Security
Among the most mysterious moments in President Obama's puzzling performance in Wednesday's debate with Mitt Romney was his response to a question about Social Security. "I suspect that on Social Security," the President said, "We've got a somewhat similar position." Obama couldn't have been more wrong. As it turns out, Mitt Romney doesn't merely want to raise the retirement age and change how retirement benefits are calculated. For years, Romney supported the privatization of Social Security, a position he is rightly afraid to acknowledge now.
In February, Romney offered his audience at an empty Ford Field in Detroit pretty much same brief description of his plans for Social Security as you can find on his web site:
"When it comes to Social Security, we will slowly raise the retirement age. We will slow the growth in benefits for higher-income retirees."
But what "we" won't do, Governor Romney now claims, is privatize the Social Security system for millions of American retirees. And that, as ThinkProgress documented, is a far cry the position he held until just a couple of years ago.
During a 2008 GOP presidential debate, Romney explained of the Bush approach:
"The President said let's have private accounts and take that surplus money that's being gathered now in Social Security and put that into private accounts. That works."
The year before, Mitt frequently repeated his preference for private accounts:
June 2007: When a college student asked Romney how he, as president, planned to solidify Social Security's future, he endorsed private accounts: "One thing that the president proposed [on Social Security] that is a good idea is to take some of that money, or all of that surplus money and allow people to have a personal account. So they can invest in things that have a higher rate of return than just government debt. They can invest in things like our stock market or the world's stock market...so that they can get a better return, and maybe that would make up for some of the shortfall. That's a good idea."
October 2007: At a town hall, Romney said there were "two major paths" lawmakers could take to shore up Social Security. The first, he said, was "to raise taxes on people, which I don't want to do. And the other is to allow some portion of people's money that they're now having taken out of their salaries to be invested in Social Security." When an attendee told him his plan was "privatization," Romney replied, "You call it privatization. I call it a private account."
Even as recently as his 2010 book No Apology, Governor Romney proclaimed, "I also like the fact the individual retirement accounts would encourage more Americans to invest in the private sector that powers our economy." Romney liked them, even after the implosion of Wall Street in the fall of 2008 would have put those private accounts at risk. One study estimated that private accounts would lose money a third of the time. That fall, the Center for American Progress calculated that "that if a worker had retired on October 1, 2008 after 35 years of contributions to private retirement accounts, that retiree would have lost nearly $30,000 in retirement funds because of the downturn in the stock market over the last two years." And while retirees would face the risks inherent in the market, according to a 1997 analysis their Wall Street money managers would reap an estimated "$240 billion in fees during the first 12 years of a privatization scheme- this number is undoubtedly much higher now." And all the while, the Social Security Trust Fund which currently helps offset the yawning federal budget deficits would be depleted by trillions over the next several decades.
Matthew Yglesias explained that the immediate budget dilemma at the heart of every proposal to privatize Social Security. "What privatizers want to say is that current retirees will keep getting benefits and future retirees will be okay despite our lack of benefits because we'll have private accounts," he wrote last year. "But current retirees can't get benefits if my money is in a private account. And my account can't be funded if I'm paying benefits for current retirees." (Paul Ryan's 2005 proposal would have drained $2 trillion from the Social Security Trust Fund in one decade, a figure so large even the Bush administration deemed it "irresponsible.") In his book, Mitt Romney admitted his option to "allow today's wage earners to direct a portion of their Social Security tax to a private account rather than go entirely to pay the benefits of current retirees" would add to the national debt:
"The federal government would make up for its lost Social Security revenue by borrowing that amount through the sale of treasuries, just as it currently does for the rest of its deficits."
But it's not just the oceans of red ink that scared off the 2012 edition of Mitt Romney. As the polls show, the American people hate Social Security privatization as much now as when President Bush tried--and failed--to pass it in 2005. Which is why an obviously touchy Romney insisted at a New Hampshire town hall meeting he opposes the idea he once strongly endorsed:
Q: I have a question on Social Security...one way of doing it is privatizing, that people can invest their money, is that correct?
ROMNEY: I didn't say that here.
Q: Well, I saw it online, so maybe it's -
ROMNEY: I didn't mention that - there are - I didn't mention that. I described the three major one. There have been other ideas about people investing. You know, the disadvantage, I mean, the privatization of Social Security that doesn't make sense, the so-called privatizing of Social Security. There have been some who have said, "Let people save some of their money and invest it." The market goes up and down. I kind of like the system that we have in that regard.
The 2012 version of Mitt Romney, if not the 2008 model, is right that privatizing Social Security "doesn't make sense." That President Obama didn't highlight that point on Wednesday night makes even less.
Quoting:
"I suspect that on Social Security," the President said, "We've got a somewhat similar position."
(end quote)
Well, I suspect that Obama was attempting to pull Romney to the left, and see how he would respond to the “I suspect.”
According to this, we may have seen superior strategy:
http://www.telegram.com/article/20121005/COLUMN44/110059683/0/telegramtowns#.UHEs7I6g0rg
It ain’t over. Watch for Joe Biden to change the tone.