A slew of Republican Senate candidates have recently tried to dress up their support for Social Security privatization as something else entirely, denying that they support privatization while continuing to advocate for the creation of private Social Security accounts that could be invested in the markets. Pennsylvania Republican Pat Toomey, Ohio Republican Rob Portman, Arkansas Republican John Boozman, and Colorado Republican Ken Buck have all said they oppose privatization, while simultaneously advocating for private accounts.
Oregon’s Republican Senate nominee, law professor Jim Huffman, became the latest to join this club during a debate last night with Sen. Ron Wyden (D-OR). Huffman asserted that he hasn’t argued for privatizing Social Security, literally one sentence after calling for the creation of private accounts. He then reiterated his idea later in the debate:
I have argued for allowing newcomers to the Social Security system to have the option of private accounts. I have not argued for privatizing the Social Security system. There’s nothing in the record that would uphold that argument.
This is all part and parcel of the concerted conservative campaign to change the terms — but not the policy prescriptions — of Social Security privatization. Privatization polls badly, so conservatives want to change the word, but not the idea.
And the fact remains that creating private Social Security accounts would impose new risks on seniors, create new administrative costs and benefit reductions, and wouldn’t even set the Social Security system on a path to solvency. In fact, such a move would force the federal government into trillions of dollars of new borrowing, as money that should have gone into the general Social Security system gets diverted into the creation of personal accounts.
An analysis of private accounts done by Robert Shiller found that, “given an all-stock portfolio and typical stock market returns across the world’s 15 largest economies, a worker’s account would have negative returns 33 percent of the time.” And diversifying an account with other investments such as bonds actually increased the likelihood of a negative return. This is an unnecessary risk for seniors — more than 13 million of whom are kept out of poverty only because of Social Security — no matter what those on the right want to call it.