June 22,2005

Baucus Rejects New Social Security Plans

Senator Warns Against a “Bait and Switch” Strategy

(WASHINGTON, D.C.) Today, U.S. Senator Max Baucus rejected new proposals that woulddramatically change Social Security.

“Rumors have been flying that privatization is off the table and we’re here to clear upthose rumors,” Baucus said. “Until the President publicly takes private accounts off the table,bait and switch is a real possibility.”

Baucus warned that a bill addressing the financial challenges of the program withoutprivate accounts would most likely pass the Senate, but the House would likely add privateaccounts in Conference, ultimately leading to privatization of Social Security.

“Both of the Social Security plans being talked about today could be part of the bait andswitch game,” Baucus said. “I’ve said it before and I’ll say it again, private accounts need to betaken off the table. We need to be strengthening Social Security, not weakening it. I cannot andwill not support a plan that would create huge benefit cuts or add trillions of dollars to the debt.Once privatization is off the table, we can work together on a common sense solution tostrengthen Social Security for future generations.”

Baucus expressed his concern with packages proposed by Senator Bennett, SenatorDeMint and in the House of Representatives. Baucus noted that under the Bennett proposal, aworker who is born five years from now who retires at age 65 and has average earnings of$60,000 a year would lose more than 50 percent of his or her benefits.

“Social Security is the primary source of income for two-thirds of seniors, and the onlysource of income for one-fifth of seniors,” Baucus said. “Retirees should be receiving thebenefits they’re guaranteed to collect, not have them taken away.”

Senator DeMint’s plan would fund private accounts with the surplus of the SocialSecurity Trust Fund. The plan would take money out of Social Security and would worsen-- notimprove--Social Security financing. Republicans in the House have discussed introducing asimilar measure.

“This plan is a smaller version of a bad idea, and that bad idea is private accounts,”Baucus said. “Senator DeMint’s plan compared to President Bush’s plan is like going fromsmoking three packs of cigarettes a day down to one. No matter how you look at it, it’s bad foryou and hazardous to your long term health.”

Baucus, ranking member of the Senate Finance Committee and a leader on the SocialSecurity issue, reiterated his concerns with adding private accounts to the Social Securityprogram.

“Privatizing Social Security would cut guaranteed benefits and burden generations tocome by adding trillions of dollars to the national debt,” Baucus said. “It’s time to drop privateaccounts from the Social Security conversation and go back to the drawing board to develop aplan that will enjoy broad support as well as strengthen Social Security for generations to come.”