But Donohue also ventured into a discussion of “America’s debt crisis”:
To control deficits, we must first put unemployed Americans back to work so that they are paying taxes instead of collecting benefits. But Congress and the administration must also move swiftly to reduce spending. The Chamber will support strong proposals even if we don’t like all the details. We’ll also make the case for entitlement reform because any plan that fails to tackle these runaway programs is doomed to fail.
Though Donohue provided no details on what sort of “entitlement reform” the Chamber has in mind, it’s pretty easy to deduce what he’s talking about. After all, during the campaign season (as it did everything it could to elect Republicans), the Chamber fearmongered against cuts to Medicare, one of the big entitlement programs. So that leaves the other big entitlement program as the Chamber’s focus for cuts: Social Security. And when it comes to Social Security the Chamber has one policy prescription — privatization:
– The only way to permanently strengthen Social Security is to transform the system into a program with real savings to back its promises to future retirees.
— The best way to do this is with a personal account component as President Bush and others have proposed.
As Senate Majority Leader Harry Reid (D-NV) aptly explained over the weekend, there is no Social Security crisis. And the program is barred, by law, from adding the country’s deficit and debt. But still, conservatives of all stripes have used the deficit as an excuse to attack Social Security.
While there are progressive changes that can be made to Social Security to further protect the most vulnerable citizens and ensure the programs long-term solvency, Bush-style privatization through the creation of personal retirement accounts would be a huge mistake. Personal 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. But Social Security is where the Chamber will try to cut, as it fights to keep corporate tax loopholes open and income taxes on the rich as low as possible.