Joe Reiterates Call to Protect Social Security as Toomey Sticks by Plan to Put Benefits at Risk
Alliance for Retired Americans Endorses Sestak for Senate
PHILADELPHIA, Pa. – U.S. Senate candidate Joe Sestak called on leaders today to protect Social Security against threats of privatization. Congressman Toomey’s plan would place the fate of the system in the hands of Wall Street, putting our retirement security at great risk.
Speaking with seniors at Philadelphia’s Hopkinson House and across the state via conference call, Admiral Sestak underscored the importance of protecting the Social Security system and ensuring fair benefits. He talked about the need to address current flaws in the Social Security formula, highlighted by today’s news that the cost-of-living adjustment (COLA) would likely not change for the second year in a row.
“Social Security is the cornerstone of our retirement security,” said Joe, who has fought to protect the trust fund and has introduced legislation to correct failings in COLA. “It’s outrageous that Congressman Toomey wants to gamble our Social Security on Wall Street.”
Receiving the endorsement of the Alliance for Retired Americans, Joe said 20 million seniors — including 700,000 in Pennsylvania – would be at risk of poverty under Congressman Toomey’s privatization plan as Wall Street would reap billions in profits, all while adding $4.9 trillion to the national debt.
Joe “has fought his entire time in Congress to protect and expand the trust fund,” said ARA Pennsylvania chapter vice president Jerry Pollack, telling seniors: “You will have a clear choice this fall, between Joe Sestak, who will defend Social Security, or Pat Toomey, who will gamble it away on Wall Street.”
“I know this is the wrong approach,” Joe said of Congressman Toomey’s plan. “We need to keep this vital program solvent for generations to come. There are responsible ways to do so without endangering benefits on the stock market.”
Joe said one solution would be a return to the tax rates of the Clinton era (when we created 23 million jobs) for the top two percent of earners. This restored tax rate for the wealthiest of Americans who received the majority of the tax cuts of the Bush era (when we created zero net jobs) – could cover Social Security’s shortfall over the next 75 years.
“This is no time to gamble with our retirement security,” said Joe. “We need to take the tough steps needed to address long-term solvency. But this should not be done by allowing Wall Street to play roulette with the most successful federal program in history.”
Joe’s COLA legislation, the Elderly Purchasing Protection Act, would establish a Consumer Price Index for Elderly Consumers (CPI-E) that would replace the current index in the COLA formula for seniors. It would accurately mirror increases in their cost of living, taking into fair consideration healthcare and other major expenses for recipients of Social Security, which also includes Americans with disabilities, Veterans and those collecting railroad retirement benefits.
This new measure takes into account that retired Americans spend more than twice as much on health care costs as working Americans, and will provide more stability in purchasing power for seniors and other Social Security recipients.
Despite dodging the question and often denying that he favors privatizing Social Security, including at the Pennsylvania Press Club in August, Congressman Toomey finally admitted his plan last week to National Public Radio. [WHYY, Radio Times with Marty Moss-Coane, 10/1/2010] Click here to listen.
In reality, Toomey dedicated an entire chapter in his book, The Road to Prosperity, to his plan. In his book, he:
Clarifies his plan would invest seniors’ retirement savings in the stock market– “Opponents of personal accounts – usually Democrats – have convinced workers that a market based system will sound the death knell for retirement security. This is awfully silly when you consider that millions of Americans invest in the Market everyday.” [The Road to Prosperity, p. 132-133]
Explains how financial firms would earn millions in fees from private accounts — “For a very modest fee, a financial services firm provides this service efficiently and seamlessly. Social Security reform could work the same way.” [p. 140]
Admits his plan would add to the deficit — “The truth is, personal accounts would lead to larger near-term deficits in the Social Security system, and these deficits should be financed through borrowing.” [p. 141]
Then discusses the risk of investing money in the stock market — “If large American banks had gone into bankruptcy instead of being bailed out by taxpayers, several things would have happened. First, stockholders would have been virtually wiped out. This is unfortunate but it is the risk inherent in owning stocks.” [p. 200].