Baucus and Reid Warn President On Prizatization

The Democratic leader in the Senate, Harry Reid, and the ranking Democrat on the Senate Finance Committee, Max Baucus, have written the president to warn him against a renewed effort to privatize Social Security. The president's recent nomination of Michael Astrue to become Commissioner of Social Security and appointment of two ardent proponents of privatization to the Social Security Advisory Board may explain the timing of this letter. The text of the letter is below:

September 20, 2006 Dear Mr. President:

We are writing to express our deep concern about your recent statements that you remain committed to privatizing Social Security and will make privatization a top priority after this year's congressional elections.

We understand that you and most Republicans genuinely believe in privatization and remain strongly committed to pursuing this approach. However, we want to make clear that Democrats are just as adamantly opposed to privatization and remain strongly committed to defeating this seriously misguided proposal. We believe the American people are on our side in this debate, and for good reason.

Cutting Social Security's funding by diverting payroll taxes into privatized accounts, as you have proposed, would require deep cuts in guaranteed benefits and lead to a massive increase in borrowing. This would weaken Social Security, not strengthen it. The resulting benefit cuts would harm all seniors in the future, even those who prefer not to open a privatized account. Meanwhile, the massive new federal borrowing would weaken our economy, saddle future generations of Americans with trillions of additional debt and increase our economic dependence on China, Japan and other foreign nations.

Our country faces serious economic problems, including a tightening squeeze on the middle class, rising prices for gas, health care and college and a troubling long-term budget shortfall. We want to work with you on a bipartisan basis to address these challenges. However, we would strongly resist the privatization of Social Security, which would only make our fiscal problems worse and jeopardize Americans' retirement security. Therefore, as you develop your agenda for the post- election period, we strongly urge you to reject privatization and instead focus on bipartisan solutions to the most serious problems facing our nation.

Sincerely,

Harry Reid (D-Nev.), Democratic Leader

Max Baucus (D-Mont.), Ranking Member, Senate Finance Committee