Democrats Won't Discuss Topic of Private Accounts
May 30, 2005
Democratic National Committee Chairman and former presidential candidate Howard Dean said his party won't come to the table to discuss Social Security reform unless President Bush removes his controversial private accounts from debate.
Speaking on NBC's Meet the Press, Dean compared the idea of allowing workers to invest a portion of their Social Security tax into a mix of stock and bond funds tantamount to putting their life savings into the hands of the people who brought down Enron. Dean, who is charged with raising campaign money for the Democratic party's challenges for the mid-term elections in 2006 and the presidency in 2008, accused Bush of mixing Social Security reform with party ideology, a reference to the president's vision of an "ownership society."
"There's only one reason to put private accounts in Social Security... And that is that they have an agenda to privatize Social Security. It helps their campaign contributors and the businesses that support the president, and it also removes the risk from the government and puts it on the individual recipients," Dean explained.
"And it doesn't earn anymore money once you get through the fees and so forth. When the president is willing to really sit down with us, we'll sit down with him," he said, adding that Bush "has got to stop this nonsense of insisting that we privatize the last bastion of hope for retirees in this country." Although Dean said further that his party wouldn't offer a reform plan because the president would probably reject any proposal, he didn't object to suggestions of a tax hike.
Bush has admitted that the private accounts element of his Social Security reform plan will do little to head off an anticipated shortfall in the 75-year-old pension plan that's expected to occur by 2042, but he still favors allowing workers to divert 4% of the 12.4% payroll tax into the accounts. Critics say the plan would leave worker retirement money to the risk of Wall Street's ups and downs. They also say the only party to profit from the plan would be Wall Street money managers, who would collect fees on thousands of accounts.
A key voice in the mutual fund industry, MFS Chairman Robert C. Pozen, has suggested a reform plan that contains an option for private accounts and has been endorsed by Bush. Pozen, however, isn't a fan of private accounts, beyond their role as a potential "sweetener" to a reform plan. He also sees no gain for the money management industry if the private accounts came to fruition.
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