Obama’s Social Security Whopper
September 20, 2008
He tells Social Security recipients their money would now be in the stock market under McCain’s plan. False.
In Daytona Beach, Obama said that “if my opponent had his way, the millions of Floridians who rely on it would’ve had their Social Security tied up in the stock market this week.” He referred to “elderly women” at risk of poverty, and said families would be scrambling to support “grandmothers and grandfathers.”
That’s not true. The plan proposed by President Bush and supported by McCain in 2005 would not have allowed anyone born before 1950 to invest any part of their Social Security taxes in private accounts. All current retirees would be covered by the same benefits they are now.
Obama would have been correct to say that many workers under age 58 would have had some portion of their Social Security benefits affected by the current market turmoil – if they had chosen to participate. And market drops would be a worry for those who retire in future decades. But current retirees would not have been affected.
In our “Scaring Seniors” article posted Sept. 19 we took apart a claim in an Obama-Biden ad that McCain somehow supported a 50 percent cut in Social Security benefits, which is simply false. Then, on Saturday Sept. 20, Sen. Barack Obama personally fed senior citizens another whopper, this one a highly distorted claim about the private Social Security accounts that McCain supports.
What Obama Said
That’s untrue. All current retirees would be covered by exactly the same Social Security benefits they are now under what the Obama campaign likes to call the “Bush-McCain privatization plan,” which Bush pushed for unsuccessfully in 2005.
Who Would Have Been Affected
Nobody born before Jan. 1, 1950 could have participated, and anyone born on that date would be 58 years old now. The earliest possible age for receiving Social Security retirement benefits is 62, for early retirement at reduced benefits. Full retirement age is currently 66, and scheduled to go up to age 67 in coming years.
It is certainly true that the stock market carries risks, as recent events remind us. The Dow Jones Industrial Average is down nearly 17 percent for this year, for example, and despite gains in other years it is still barely above where it was at the start of 2000. But historically there have also been rewards for those who make diversified investments and hold for long periods. When Obama spoke, the Dow Jones average still stood 305 percent higher than it had at the start of the 1990’s.
Disappearing nest eggs?
Footnote: When we contacted the Obama campaign for comment, spokesman Tommy Vietor defended Obama’s remarks as accurate:
We would grant Vietor a point if Obama had made any mention of workers being fearful of their future retirement (although this would apply only to those who had chosen to participate in private accounts, and not to everybody.) But Obama did not say that. Instead, he referred to “elderly women” in danger of poverty. He spoke of families “scrambling to figure out how to give their mothers and fathers, their grandmothers and grandfathers” a secure retirement – not to families worrying about their own retirement. If Obama did not mean what he said to be a reference to current retirees, he could say so clearly and amend his words.
-by Brooks Jackson
The White House, “Strengthening Social Security for the 21st Century,” Feb 2005.
Dow Jones & Co. “Dow Jones Industrial Average Historical Performance” Spreadsheet accessed 20 Sep 2008.
An Obama-Biden ad says McCain supports “cutting benefits in half” for Social Security recipients. False!
Democrats call it a “cut.” Compared to what?
We find that brokers netted only 16 cents in fees to manage a $10,000 retirement account under the federal retirement system on which Bush is modeling his private Social Security accounts.
Copyright © 2003 – 2008, Annenberg Public Policy Center of the University of Pennsylvania
FactCheck.org’s staff, not the Annenberg Center, is responsible for this material.
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