By Don McIntosh
The Northwest Labor Press
Special to PAI

WASHINGTON (PAI) - The details are dense, a little complex, and take time to digest. But the retirement security of working people may rest on whether they understand what GOP President Bush proposes to do to Social Security.

Bush's Feb. 2 State of the Union address was the opening shot in a high-profile public debate. To win it, Bush and his GOP and business allies must feed the belief Social Security is in crisis, push a platform saying private accounts would solve it, and then outmaneuver opponents - led by the AFL-CIO - who point out that private accounts would make that crisis worse.

But let working people beware, because every poll-tested Bush talking point is contaminated with what Mark Twain famously referred to as "lies, damn lies and statistics."

Conveniently, most of them are contained in a "spin" manual distributed Jan. 27 to Republican members of Congress who gathered at the posh Greenbriar resort in West Virginia for a secret conclave on the issues.

Copies of the manual found their way into journalists' hands. Entitled "Saving Social Security: A Guide to Social Security Reform," the 103-page document is a playbook for Republican advocates of privatization on "How to talk about Social Security personal accounts."

More than 47 million Americans currently receive Social Security benefits: 33 million retired workers and their dependents, 7 million survivors of deceased workers, and 8 million disabled workers and their dependents. And the system's administrative costs are less than 1 percent.

In short, it's the longest-lasting, farthest-reaching, most efficient, and most uniquely popular government program in U.S. history. So those who seek to dismantle it can't criticize it directly. They must create doubt in the public mind about Social Security's future.

Here's how Bush and his allies intend to sow anxiety about Social Security:

Endlessly repeat a statistic about the shrinking number of workers per retiree. "Your audience will be persuaded by the falling ratio of workers per retiree. Cite the ratios of 16 to 1 in 1950, down to 3.3 to 1 today, and falling to 2 to 1 in 25 years. Be sure to reference the source of the data, the Social Security Administration," the GOP spin manual says.

This ignores two facts: First, productivity has increased enormously, so that it takes fewer workers to provide society's basic needs; and second, Social Security payroll taxes have been adjusted upward 21 times in 68 years, to account for increased numbers of retirees.

Take simpler, more obvious solutions off the agenda. If Social Security faces a shortfall in 2042, as the trustees project, then the obvious solution would be to raise the Social Security payroll tax the appropriate amount, trim benefits, or some combination of the two.

Bush has tried to limit the debate by ruling out the payroll tax increase. To deal with changing demographics, the Social Security tax was raised in small increments under Presidents Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Carter, Reagan and Bush Sr. But Bush says he can't do it - because it would harm the economy.

Present a privatization proposal as the only solution - and change the name. Bush does not call it privatization any more. "Privatization" no longer polls well, GOP lawmakers learned.

The "Saving Social Security" GOP spin manual advises them: "Privatization connotes the total corporate takeover of Social Security. This is inaccurate and thoroughly turns off listeners, who are very concerned about corporate wrongdoing."

Instead, backers are to refer to it as "personalization," which "suggests increased personal ownership and control." The accounts are no longer to be referred to as "private accounts," as Bush called them last year. Now they are "voluntary personal retirement accounts."

Distract people from the fact that private accounts worsen Social Security's financial health. Whatever they're called, the accounts won't solve the system's supposed crisis. Remarkably, senior administration officials acknowledged that to reporters in a White House briefing after Bush's State of the Union address.

Private accounts would worsen Social Security's finances because any money taken out of Social Security for investments would have to be made up for somehow, by tax increases, benefit cuts... or borrowing.

Declare Social Security is going bankrupt. "If you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless Congress has got the willingness to act now," Bush said in a Jan. 11 talk show-style "conversation."

Bush used the word "bankrupt" five times in 45 minutes on Jan. 11, and twice in his State of the Union address. The word "bankrupt" brings to mind an entity unable to pay its debts and forced to sell off its assets and dissolve, ceasing to exist. In Social Security's case, nothing could be further from the truth.

The Social Security system is not a debtor; it's a lender, having lent $1.5 trillion to the federal government over the last 20 years. Those funds are represented by government bonds, repayable with interest, which Social Security can cash in. Social Security will be solvent, even in the worst case scenario predicted by the Bush administration, until 2042.

At that point, if Congress had made no change whatsoever - for 38 years - Social Security would have exhausted the notes. But payroll tax revenues, again with no change, are enough that it would still be expected to pay, to the beneficiaries of 2042, 73 percent of all benefits they are now promised.

Predict the system's collapse by the year 2042, as Bush did in his State of the Union address. He said it would be "exhausted." Expect to hear a lot about the year 2042, the supposed doomsday of Social Security as we know it.

Privatization backers assert as fact that 2042 is the year the trust fund will be depleted, and benefits must be cut 27 percent. That date comes from the most recent report of the Social Security trustees, the official audit of its solvency.

Like all such predictions, the "2042" date is based on complex actuarial assumptions about birth rates, death rates, marriage and divorce rates, immigration, productivity growth, inflation, employment, trends in the age of retirement, wages, interest rates, to name the most important factors. It is also their most-pessimistic option, assuming 1.8 percent growth and the current 5.5 percent jobless rate for the next 38 years.

The Social Security trustees themselves have pushed back the date. In 1997, they said it would be 2029. Last year, the Congressional Budget Office conducted the same analysis, with slightly less pessimistic assumptions, and predicted 2052.

Tell younger workers Social Security won't be there for them. Polls show this line, repeated over and over again, has had the most impact. The GOP spin manual says: "The current system cannot afford to pay promised benefits to younger workers."

If Congress stops making adjustments, which is what Bush proposes, then yes, eventually the trust fund will be depleted and Social Security will have to cut benefits by 27 percent - unless the trustees' pessimistic assumptions are wrong, or Congress raises the payroll tax 2 percent, or starts levying it on income above $90,000, in which case Social Security could afford to pay benefits to today's young when they retire.

Bush touts rewards of stock investments, but does not mention the risk. If the market is such a good investment, one might ask, why doesn't the government invest in it directly, on behalf of Social Security participants, and continue to guarantee the benefits?