POLITICSWhat’s scarier than Donald Trump? Hillary Clinton’s plans to gut Social SecurityTom Cahill | October 20, 2016
As the sun sets on Donald Trump’s presidential ambitions, a likely Hillary Clinton victory means her intent to defund Social Security may come to fruition.
The Democratic nominee recently came under fire in revealing articles by Naked Capitalism’s Yves Smith and International Business Times’ David Sirota, for her potential plans to introduce mandatory retirement savings accounts set up to enrich Wall Street — rather than expanding Social Security.
Under the new mandatory accounts, Americans would pay a 1.5 percent payroll tax to go directly into retirement accounts managed by Wall Street banks that would invest in private equity, hedge funds, and other investments that would come with hefty fees for fund managers, all courtesy of U.S. taxpayers. One of the biggest proponents of mandatory retirement savings accounts is Blackstone CEO Tony James — one of Hillary Clinton’s biggest campaign donors — who is a possible pick for Treasury Secretary in a Clinton administration.
In an email to Clinton campaign chairman John Podesta leaked by WikiLeaks, James laid out the details of the retirement savings account proposal, while simultaneously making the case to dismantle Social Security.
“We do not believe the problem can be solved by making Social Security better funded and/or adding a higher minimum benefits for several reasons,” James wrote. “Social Security was designed as a safety net for those facing poverty in old age. It was never meant to be a vehicle to guarantee a middle class retirement,” he continued.
However, according to the Social Security administration’s website, Social Security was designed to “assure workers that their years of employment entitled them to a life income.”
If Clinton wins, and appoints Tony James as her Treasury Secretary, the retirement savings accounts may become more than just a pipe dream. As David Sirota wrote, the biggest beneficiary of the program that may replace Social Security would be the fund managers themselves, extracting fees for managing retirement savings
“If this gets enacted, there are going to be thousands and thousands and thousands of asset managers that will benefit I suppose because more savings and more investment benefits all asset managers of every stripe,” James said in an interview with Bloomberg News.
When placed side-by-side with George W. Bush’s plans to merely introduce voluntary personal retirement accounts in his 2005 State of the Union address, Tony James’ plan for mandatory accounts is far more sinister.
“As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers,” Bush said. “And the best way to reach that goal is through voluntary personal retirement accounts.”
While Hillary Clinton’s closeness to Wall Street executives like James may seem innocuous as a former U.S. Senator from New York, the possibility of a Tony James appointment becomes more probable when looking at Clinton’s past statements to closed-door audiences on the topic of Social Security and Medicare.
In another WikiLeaks release, excerpts of Hillary Clinton’s paid speeches reveal the Democratic presidential nominee endorsed the Simpson-Bowles plan — which proposes cutting $1.4 trillion from Social Security — saying it “put forth the right framework.” In another paid speech to apartment industry lobbyists, Clinton made an impassioned argument for austerity, referring to Social Security and Medicare as “entitlements” in the same way Tony James did in his email to Podesta.
“Do we have to do something about entitlements? Yes. Do we have to figure out what we want to be as a nation and then pay for it? Yes. Do we have to restrain spending so that we don’t bankrupt ourselves and undermine our position at home and abroad? Yes,” Clinton told the National Multi-Housing Council in 2013.
While Clinton tweeted during the Democratic Primary that she would expand, not cut Social Security, she also said on certain issues, she had a position used for the public, and a separate, private position reserved for closed-door meetings.
“If everybody’s watching, you know, all of the back room discussions and the deals, you know, then people get a little nervous, to say the least,” Clinton said in the same 2013 speech. “So, you need both a public and a private position.”