FOR IMMEDIATE RELEASE: February 3, 2005
Invoking Spirit Of FDR, Unified Senate Democrats Demand President Not Add Trillions To Debt In Risky Privatization Scheme
Birth Tax to reach at least $30K by 2015 for every American Senators Reid, Schumer and Dem. Caucus will release letter SIGNED BY 44 SENATORS to Bush urging him to send a responsible Soc. Sec. Reform package to Congress- not one that unduly burdens future generations
Today, standing outside the Franklin Delano Roosevelt Memorial, Senators Reid, Schumer and members of the Senate Democratic Caucus presented a united front to fight against the President’s plans to send the national debt skyrocketing by privatizing Social Security – increasing the burden up to $30,000 per capita. The Senators released a letter to the White House from a unified Democratic Caucus calling on President Bush to send a plan for Social Security reform that does not exacerbate the national debt.
Senator Schumer said, “Today the Senate Democratic Caucus stands united against the idea that Social Security reform should explode the national debt. We will not allow the President to play retirement roulette and increase the tax burden on future generations with more borrowing. This growing ‘Birth Tax’ will saddle every American with over $30,000 in debt – hardly worthy of the great man this memorial represents – Franklin D. Roosevelt – the architect of greatest American program in the 20th Century.”
“Instead we urge the President to work with us on a plan to keep Social Security intact and able to serve the coming generations without adding $2 trillion in new debt. I don’t understand why the President is still enamored with private accounts, which I believe is a code word for the ultimate undoing of Social Security,” Schumer continued.
With national debt already reaching record highs, the Senators said that the President’s plan to siphon payroll tax money into private accounts would add trillions in additional debt that future generations will have to repay. The Senators called this added burden a “birth tax,” since it is money each newborn American and all Americans will have to pay back with interest, and warned that the President’s privatization plan would increase the per capita debt to close to $30,000 per capita by 2015 – up 150% from the 2001 per capita debt of $12,000.
Schumer noted that:
· With no further increases in spending or changes in tax policy, it is predicted the per capita share of the national debt will grow to over $18,000 by 2015 – a 50 percent increase in the portion of the public debt owed by each American.
· When the costs of other spending and tax proposals supported the Administration are added to the mix, including the costs of the new supplemental, the likely ongoing war costs in Iraq, the cost of making the 2001 and 2003 tax cuts permanent, and additional defense spending brings the per capita figure to over $25,000 in 2015.
· Setting aside 4 percentage points of the 12.4 percent Social Security payroll tax – nearly one-third of the tax – would require the government to borrow close to $2 trillion over the next 10 years in order to pay scheduled benefits to current and near-retirees. This would bring the per capita share of the debt to close to $30,000 by 2015, the end of the ten-year budget window.
The Senators today invoked the image of President Franklin Delano Roosevelt who pioneered Social Security and sent a letter signed by the entire Senate Democratic Caucus to President Bush, calling on the Administration to put forth a responsible reform proposal instead of a plan that would more than double the burden of the national debt for future generations.
In their letter, the Senators wrote, “In the same way that it would be immoral from a generational standpoint for a grandparent to borrow from his grandson’s college fund to buy a big-screen TV, we believe it is immoral to borrow another $2 trillion from future generations to finance Social Security reform. We are spending enough of our kids’ money. Our country needs to get back to following the teachings of Romans 13:8, which says we should ‘let no debt remain outstanding.’”
Schumer added, “Every member here also knows that Social Security needs some changes in order make sure it’s there for future generations of Americans. The question we have to wrestle with is, what sorts of changes? Does the program need minor tweaking, or does it need to be dismantled and replaced with something else?”
“We have come to this conclusion not because we believe that government does everything right, but because we believe the President’s solution is fundamentally flawed. Ironically, it makes the underlying problem – restoring long-term solvency – more difficult to solve, by taking money out of the program at exactly the wrong time. In addition, siphoning payroll tax money into private accounts will add trillions in additional debt that future generations will have to repay. That’s unacceptable.”
To view the letter to the president click here.
To view the chart click here.