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Willisms

« "Because every American should have their own nest egg." | WILLisms.com | AARP Peddling Disingenuous Polling. »

Big Winners In Social Security Reform: Minorities.

Some Democrats opposing Social Security reform claim that Bush really just wants to benefit the wealthy at the expense of the poor. "Vermeer," writing at democraticunderground.com, argues:

"If you are middle-class or poor and support Bush's 'piratization' of Social Security, you have been brainwashed and bamboozled. If you work for a living and support Bush's 'piratization' of Social Security, you have been brainwashed and bamboozled.... Bush's 'piratization' plan for Social Security will harm all but the wealthy and elite investor class."

Sure, democraticunderground.com sometimes resembles a gurgling dungeon of wild-eyed crazies, and therefore a bit of a straw man, easy prey, but mainstream Democrats use the same disingenuous class warfare strategies found in the comments of "Vermeer." During the 2004 campaign, Massachusetts Senator John Forbes Kerry published a 9-page manifesto titled "George Bush’s Social Security Plan Benefits the Banks That Contribute To Him." Kerry argued throughout the campaign that Social Security reform was an excuse for a big Wall Street giveaway.

In reality, minorities, held back by the current system, are a group that could see some of the more profound benefits from Social Security reform.

Michael Tanner, director of the Cato Institute's Project on Social Security, notes:

"Perhaps no group has as much at stake in the debate over Social Security reform as do African Americans. Elderly African Americans are much more likely than their white counterparts to be dependent on Social Security benefits for most or all of their retirement income, yet the current system often works to their disadvantage.

Despite a progressive benefit structure, Social Security benefits are inadequate to provide for the retirement needs of the elderly poor, leaving nearly 30 percent of African-American seniors in poverty. Moreover, because African Americans generally have shorter life expectancies than do whites, they receive less total Social Security payments over the course of their lifetimes.

Social Security also contributes to the growing wealth gap between blacks and whites. Because Social Security taxes squeeze out other forms of saving and investment, especially for low-income workers, many African Americans are unable to accumulate real wealth. And, since Social Security benefits are not inheritable, that wealth inequity is compounded from generation to generation.

Traditional Social Security reforms such as raising the retirement age, cutting benefits, or increasing taxes would only make the problem worse. On the other hand, African Americans would be among those with the most to gain from the privatization of Social Security—transforming the program into a system of individually owned, privately invested accounts."

National Review Online contributing editor Deroy Murdoch, who is, incidentally, African-American, believes "Personal retirement accounts are pro-black, too." He asks, rhetorically, "how raw a deal is Social Security for black Americans?"

African-Americans, Murdoch points out,

"...receive nearly $21,000 less on a lifetime basis from Social Security's retirement program than whites with similar income and marital status.

Largely due to differences in life expectancy, Social Security essentially pumps money from the pockets of blacks into those of whites."

Murdoch continues:

"A typical, two-earner couple born in 1970 can anticipate a 2.24% return on their payroll taxes, the Social Security Administration estimates. 'That's as close to lazy money as you can get,' laments Harry Alford, president of the National Black Chamber of Commerce. 'We can get better returns on investment than that.' In fact, according to a Chicago-based financial consultancy called Ibbotson Associates, the S&P 500 delivered average, inflation-adjusted, annual returns of 7.4% between 1926 and 2001, even accounting for the Great Depression, World War II, Vietnam, Watergate, that 1970s energy crisis, and the 1990-91 and 2001 downturns."

The Los Angeles Times reports that President Bush is intent on making the pitch to African-Americans:

"President Bush told African American leaders that the government retirement program shortchanged blacks, whose relatively shorter lifespan meant that they paid more in payroll taxes than they eventually received in benefits.

Bush's comments came during a private White House meeting with 22 black religious and business leaders who backed his reelection last year — marking a new line of argument in his attempts to win support for adding worker-owned investment accounts to Social Security."

While the President's inroads into the African-American community are modest, at best, there are indeed some black leaders who understand that new solutions are necessary to address stagnating problems.

shirley.gif

"I am, was, and always will be a catalyst for change."
-Shirley Chisholm, first African-American woman elected to the U.S. Congress.

One wonders whether Shirley Chisholm really meant that. Would Shirley Chisholm have accepted the dysfunctional status quo in Social Security, harmful to African-Americans, disadvantaging the poor, based on crass partisanship? Or would she have been a catalyst for change, an instrument for reform, an advocate for her constituents? Would Shirley Chisholm have taken the easy way out, avoiding necessary reform, using the issue to demagogue to her base? Or would she have broken ranks from her party to do something to help African-Americans?

What can an anti-reform reactionary like Sheila Jackson Lee (her website indicates "the Congresswoman is fighting the Republican plan to privatize Social Security") learn from Shirley Chisholm's philosophy?

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Social Security reform could lift a generation of African-Americans out of poverty; it could help the poor accumulate wealth and pass it on to future generations. Republicans need to work on their sales pitch to African-Americans, but, ultimately, if Democrats remain devoted to the failed status quo on Social Security and other issues affecting African-Americans, Republicans won't need much of a sales pitch; if Democrats continue to take the black vote for granted, African-Americans in droves will come home to the party of Lincoln.

The question of why African-Americans continue to vote roughly 9-1 for Democrats, without demanding any results in return, is an interesting one, and one WILLisms.com will tackle in the future.

Posted by Will Franklin · 26 January 2005 12:42 PM

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