In Current Economic Downturn: Retirement Savings Drop $2 Trillion

October 9, 2008

Americans Would Face Larger Loss of Wealth If Bush/Dole Attempt to
Privatize Social Security Had Succeeded

GREENSBORO, N.C. – A recent disturbing article in the Washington Post reported that Peter Orszag, director of the Congressional Budget Office, told a Congressional panel that the “stock market’s prolonged tumble has wiped out about $2 trillion in Americans’ retirement savings in the past 15 months.” In the two days since Orszag’s appearance, the Dow has continued steep declines, dropping 189 points yesterday and 508 points the day before.

In 2002, Elizabeth Dole ran for the U.S. Senate using privatization of Social Security as one of her major platforms. In 2005, Bush pointed to Dole to show one could champion privatization and win. Gannett News Service reported that “Dole, who campaigned on creating privately managed Social Security accounts, is steadfast in her support of the president’s plan.” In 2006, she voted to raid the Social Security Trust Fund to advance President Bush’s unpopular plan to privatize Social Security. While voting with Bush 92% of the time, Dole voted in 2003 in favor of allowing the Social Security Trust Fund to be used to pay down the national debt, which, under the Bush-Dole team, has increased 60% to $10.2 trillion.

“It’s clear that had privatization passed, the Bush-Dole special interest-based economy would have broken the pact our country has made with millions of Americans who did nothing but work hard, provide a better life for themselves and their loved ones, and think that they would spend their retirement years in relative comfort,” said state Senator and U.S. Senate Candidate Kay Hagan (D-Guilford). “The real problem with Social Security is this massive Republican buy-now-pay-later mentality that has resulted in record debts for our future generations. While I support a bipartisan, responsible approach to adjusting Social Security to ensure its long-term stability, privatization of any kind is off the table, particularly when reports like this come to life.”

In North Carolina, 1.6 million people depend on the Social Security they receive, with payments averaging $1,064/month per retiree. The collapse of our financial markets has made it clear that gambling with our promise to millions of Americans would have been fatal to our economy and left many retirees without anything. The Post article quotes Rep. George Miller, chairman of the House Committee on Education and Labor, pointing out, “Unlike Wall Street executives, American families don’t have a golden parachute to fall back on. It’s clear that their retirement security may be one of the greatest casualties of this financial crisis.”

While Congress considered the bailout package last week, Kay advocated for stronger limits on such corporate CEO “golden parachutes” and said ultimately, had she been in the Senate, she would have had to vote against the proposed package because it protected Wall Street and left Main Street to fend for themselves.

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