Social Security plan draws critics in N.H. Democrats say privatization risky, unnecessary

CONCORD, N.H. – New Hampshire Democrats launched a pre-emptive strike Monday against President Bush’s plan to let younger workers invest a portion of their Social Security payroll taxes in the stock market.

At a news conference organized by the state Democratic Party, a variety of academics, activists and others called Bush’s plan risky, expensive and unnecessary.

“There are ups and downs to the market. Sometimes you gain, sometimes you lose,” said Bob Stauffer, president of the New Hampshire Association of the Elderly.

Stauffer said he’ll be watching to see how the Bush plan deals with the market’s volatility. “What do they do with the losers? What happens to those people in the new system?”

A presidential commission released a draft report Friday that said Social Security’s future is in crisis and the system will have to reduce benefits and increase taxes or government borrowing to continue. The draft report was written by commission staff members; the full commission meets Tuesday to discuss it.

Speakers at the news conference said the system is far from a crisis.

The system’s trustees in May said Social Security’s trust fund won’t run out of cash until 2038, a year later than earlier estimated, noted Steve Gorin, a Plymouth State College professor of social work. In 2038, the system will be able to meet 73 percent of its obligations.

Gorin said Bush’s plan to close that gap through private investments in the stock market does not agree with the system trustee’s market growth estimates. Setting up and maintaining the new privatized system could cost more than $1 trillion, Gorin said, and would further handicap the new system.

“We believe President Bush’s plan could bring Social Security crashing to the ground,” he said.