The Social Security Administration announced Thursday that Social Security benefits are set to jump by 5.8 percent next year, the largest increase in more than 25 years. But if George Bush and John McCain had implemented their plan to privatize Social Security and put our hard-earned money into risky private accounts on Wall Street, seniors would be seeing a massive reduction in their benefits instead.

As this ad explains, putting John McCain and Wall Street speculators in control of Social Security is a gamble Americans just can’t afford to take.

Paid for by American Federation of State, County and Municipal Employees PEOPLE (1625 L St, NW, Washington, DC 20036) and not authorized by any candidate or candidate’s committee.

This entry by AFSCME President Gerald McEntee was originally posted on The Huffington Post.

After days of silence from the White House, President Bush emerged last night to tell a national television audience that his request for a $700 billion blank check for bankers was dead. Instead, the president capitulated on some of the key points that Democrats, labor and progressive groups have been demanding in any federal financial bailout, including the need for oversight, limits on executive compensation and protection for the taxpayers who will be footing the bill.

The threat to Wall Street clearly got the president’s attention. That’s great. But it’s hard not to be amazed at the threat to working Americans that he’s ignored all year long. After all, we’ve lost more than 605,000 jobs this year, while Bush echoed John McCain that the economy was fundamentally strong. 9,800 people lose their homes to foreclosure every day, while Bush and McCain opposed federal assistance. 45 million Americans go without health insurance, while Bush and McCain ignore the country’s demand for quality, affordable health care for all.

They insist they oppose “big government” – except when their friends on Wall Street ask for help! The struggles of America’s working families don’t cut it for them. Nope. Problems on Main Street are to be ignored. However, led by President Bush and his anti-regulation, pro-market, anti-government, free-market-cheering corporate cohorts, the federal government is swiftly coming to the rescue of the financial markets.

The mess on Wall Street does need an urgent fix and it is an appropriate role for government. It’s also the government’s role to help prevent these kinds of crises in the first place, and to make sure that this week’s solution tackles the whole problem, because the problem is bigger than Wall Street.

But last night, Bush agreed to several of the common-sense proposals given by those who want to resolve the crisis but ensure that tax dollars won’t be given without strings attached. However, the president continues to ignore the needs of American workers laid off this year, state and local governments that are reeling under the failed Bush economy, and families who are losing their homes and savings while Bush has been in charge.

For working families, the Bush message is clear: “You’re on your own.” So too are state governments, who have to meet their responsibilities to their citizens no matter what the federal government does. Not only is that approach not right, it also won’t work.
As Bush drove the national economy over the cliff, state and local governments have been put into an ever-tightening vice grip. Their budgets are bursting at the seams while their cash flow is drying up.

This creates another real crisis – just when citizens’ needs are greatest – our state and local governments are least able to provide that assistance. But throughout the last year, George Bush and John McCain have turned a blind eye to those who are struggling to keep their homes, their health care and their jobs during this economic downturn. Back then they were talking about “market correction.” Only now are they talking about government intervention.

While the federal government comes to the aid of Wall Street, it also needs to help the families on Main Street. States need immediate assistance to prevent cuts in health care and vital services. They need more resources to create jobs and complete infrastructure repairs. They need funds to help families maintain a basic standard of living. Federal assistance for programs such as Food Stamps and Medicaid are especially important right now. While we must restore accountability and stability to our nation’s financial institutions, we also can’t turn our back on the urgent needs of millions of hard-working Americans who struggle to pay the bills, feed their children and seek health care if they fall ill.

This is America – we know how to take on tough challenges. And we can do more than one thing at a time. We have to rescue the economy and our state governments and the working families who depend on them.

There are tough choices to be made and Congress should make them. They should insist on fairness for all rather than a bailout for the wealthy few. They should help our state governments along with the Wall Street firms. They should insist on a bailout that’s accountable, transparent and prevents these problems in the future. Congress should remember that the goal here is not to bail out Wall Street but to rebuild the economy and rebuild America’s middle class.

This entry by AFSCME President Gerald McEntee was crossposted on The Huffington Post.

On Monday of last week, John McCain discussed the economic crisis facing Wall Street before an audience in Jacksonville, Florida. Reflecting on the turmoil then engulfing the economy, McCain reassured the crowd that “the fundamentals of our economy are strong.” It is a line he has used repeatedly throughout the past year. McCain spoke at the beginning of a week when the financial markets began to implode. Major American business institutions that had survived the Great Depression failed to survive the week, brought down by the mismanagement and excess of the Bush years. One might ask Senator McCain to explain why a country whose economy is fundamentally sound is now facing the greatest economic crisis in 70 years. And why are hard-working citizens being told to pick up a tab of $700 billion to pay for the huge mess that the greedy, Republican free-marketers have left after their disastrous experiment with “look the other way” regulatory policies?

Senator McCain wants to continue the experiment, this time on health care. Writing in the magazine of the American Academy of Actuaries, Senator McCain suggests that we should apply the same hands-off approach that he encouraged throughout the past decade on Wall Street to the health care industry. McCain wrote, “Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.” I am absolutely certain that the American people have had enough Republican-generated “innovative products” to last a lifetime. What we need is quality, affordable health care for all.

American families have already seen what unregulated corporate gurus can do to workers’ pensions and investments, including their depleted 401(k) accounts, yet John McCain wants the insurance industry to enjoy the same kind of unregulated excess that he gave the investment bankers. We already know the havoc insurance companies can inflict on families – denying coverage and care – with the limited regulations they face today. As it is, they run roughshod over consumers. Why would John McCain want to make things worse?

Senator McCain talks tough about the economic disaster facing Wall Street and investors across the country, but his talk doesn’t match the deregulation agenda he’s pushed during his many long years in Washington. Yet, even when he’s talking tough, he reveals how little he knows about the economy. Last week, as the depth of the crisis became clear, he said that if he were President, he would fire former Congressman Chris Cox, who George W. Bush appointed to head the independent U.S. Securities and Exchange Commission. Unfortunately, no one told Senator McCain that the U.S. President cannot fire the chairmen of independent agencies. That’s why they are “independent.” As chairman of the Senate Commerce Committee, you would think McCain would know this.

AFSCME has been leading the fight for shareholder “say on pay proposals,” and we’re battling to make sure that restrictions on excessive executive compensation are included in the bail-out legislation heading to Congress. John McCain says he thinks executive salaries are too high, but he hasn’t done anything about it. On the campaign trail, he’s taking on a populist tone: “That same executive got $21 million of your money,” McCain said of Fannie Mae’s CEO Jim Johnson. “And the other CEO [Frank Raines] . . . got $25 million of your money. Let’s tell them to give it back. Let’s tell them to give it back.” Both Frank Raines and Jim Johnson were outrageously overpaid, but they were paid with shareholder funds, not tax dollars. It is shocking to learn that Senator McCain, who claims that his decades on the Commerce Committee is valuable economic experience, was unaware that until last week, Fannie Mae was owned by shareholders, not by taxpayers.

Senator McCain may not know the details of Fannie Mae’s structure, but he should know more about his staff’s close connection to the failed company. News reports today indicate that Washington lobbyist Rich Davis, Senator McCain’s top campaign aide, was paid $30,000 a month for five years by Fannie Mae. It seems Fannie Mae paid that money to Davis because of his closeness to Senator McCain. Perhaps the senator should spare us his newly found populist rhetoric and simply fire Davis. While he’s at it, he might ask him what he did to earn $30,000 a month. He might also ask him to “give it back.”

From the Economic Policy Institute (EPI): Fears about the future of Social Security were allayed on Friday by a new report issued by the independent Congressional Budget Office. The report finds that not only can future beneficiaries keep counting on receiving benefits in retirement, they can expect those benefits to be larger – even after adjusting for inflation – than those being paid to today’s retirees.

Bush and company in 2005 failed miserably to convince the American public that Social Security privatization was the holy grail of retirement security. Doomsayers will continue to claim the sky is falling, but the facts tell a different story.

EPI outlines the CBO’s findings in a new Policy Memo.

On Monday, July 7, Senator John McCain told a Denver town hall meeting that Social Security, as originally conceived more than 70 years ago, is an “absolute disgrace.” In his latest entry on the Huffington Post, AFSCME President Gerald McEntee says the real disgrace is how little Sen. McCain understands about Social Security and the U.S. economy.

Just like George W. Bush, McCain’s out to destroy something he knows nothing about. When they combine ignorance with power, they leave it to the rest of us to pick up the pieces from the damage they cause. Bush tried to destroy Social Security and we fought him tooth and nail.

If John McCain thinks he can do what we kept Bush from doing, he’s got another thing coming. The American people won’t let him destroy Social Security.

Read the full post.

This just out: A Time Magazine feature on executive compensation and how the “Say on Pay” movement began… at AFSCME. AFSCME has led shareholder reform efforts at major U.S. corporations such as AIG, Morgan Stanley and Home Depot and has played a leading role fighting for more democratic elections on corporate boards and has led the effort to restrain runaway executive pay. Read the full story.

Also out this week, USA Today ran a three-page feature on executive compensation complete with an interactive chart of CEO pay and stock awards at the top 50 companies in the S&P 500.

Today AFSCME is leading an effort to vote against the directors at Washington Mutual, who decided to award bonuses to executives despite the huge losses to the company from the subprime mortgage mess for which they were directly responsible. We will continue these efforts until skyrocketing CEO and executive pay is brought under control.

The Social Security Board of Trustees released its annual report on the program’s financial status. According to Treasury Department Secretary Henry Paulson, its findings confirm “that the Social Security program is financially unstable and requires reform.”

Really?

While doomsayers are already claiming the sky is falling, a close look at the numbers tells a different story.

According to an analysis from the Center on Budget and Policy Priorities (CBPP), the trustees’ report actually

“reaffirms that Social Security does not face a near-term crisis and can continue to pay full benefits for more than three decades.”

According to the CBPP, there are far more troubling threats when it comes to the country’s financial well-being:

Anyone concerned about Social Security’s long-term shortfall ought to be equally (if not more) concerned about the long-term fiscal impact of extending the 2001 and 2003 tax cuts. Making the tax cuts permanent will cost more than three times as much, over the next 75 years, as the 75-year shortfall in Social Security.

In other words, Bush’s tax cuts for the rich are much more damaging for the economy than any alleged Social Security crisis. As the AFL-CIO blog points out, this is a thinly-veiled scheme to once again push for privatizing the most successful program in America’s history:

Bush and his cohorts in 2005 failed miserably to convince the American public that Social Security privatization was the holy grail of retirement security. But still, they persist in trying to sell this snake oil.

Indeed they do. Witness Sen. John McCain’s plan to divert American’s retirement money into risky private accounts, almost a carbon copy of Bush’s failed initiative.

Paulson, Bush, McCain & company might have a short-term memory when it comes to playing with people’s retirement security. Working families don’t.

For 70 years, Social Security has worked for America, providing guaranteed benefits in retirement, and to workers and their families in the event that they become disabled or die before retirement. Sen. John McCain, as noted in the blog Crooks and Liars, is promoting a dangerous and irresponsible scheme to privatize Social Security.

McCain told the Wall Street Journal recently that he still supports President Bush’s discredited 2005 push to divert Americans’ hard earned Social Security into risky private accounts, which failed because of widespread opposition, including from AFSCME. His plan would hurt all of America’s working families, and would lead to huge cuts in guaranteed benefits that workers have earned and are counting on. Matthew Yglesias at The Atlantic gets it right when he says that McCain’s proposal is “a lethal combination of bad ideas and total lack of comprehension.”

While he may be a maverick, Senator McCain’s plan would radically transform Social Security from guarantee of retirement security for millions into a gamble.

Like David battling Goliath, a handful of city workers have decisively defeated a powerful foe, armed only with a lawsuit as their slingshot.

The “David” in this case: 29 members of Local 2957 (AFSCME Council 38), whose vested retiree health benefits were arbitrarily cut off by city officials in 2004 in a ruling requiring that all city retirees pay the same premiums as if they were active employees.

The employees sought justice in court. Twice they won, twice the city appealed. Now, in a third (and hopefully final) decision (PDF) the U.S. Court of Appeals upheld a lower court ruling that …

“… correctly determined that the [city council’s] resolutions were unconstitutional under the Contract Clause [of the U.S. Constitution].”

This story in The Benton Courier, and this posting on AFSCME Council 965’s blog, tells the tale.

The Supreme Court has just refused to hear a case that let major banks complicit in the Enron fraud off the hook from paying damages to investors hurt by the scandal.

As a story in The Washington Post said:

The ruling is a staggering setback to the movement to expand investor rights. Often, financial experts say, business partners and corporate advisers are the only deep pockets left to tap after a scandal-ridden company has succumbed to bankruptcy.

If this was not enough, only a few days earlier the court ruled that third parties can’t be held liable for damages in cases where they aided schemes to commit fraud. The case, known as Stoneridge Investment Partners v Scientific-Atlanta, is also bad news for working families.

Why?

It’s simple. Think about the mortgage crisis, for example. Mortgage brokers and investment banks built a system in which they generated huge fee revenues and then passed off risk to investors. These risky mortgages were packaged by Wall Street bankers to sell to investors like our public pension funds.

Now that there’s a mortgage crisis, our retirement funds could be hit by losses that would make Enron look pennyante. Meanwhile, the parties responsible have less to fear now because, just like the banks involved in the Enron scandal, they may be immune from litigation.

In the end, the failed CEOs who led these companies walk about with hundreds of millions of dollars as working people are left holding the bag. This is why the fight for investor rights is also our fights because, ultimately, it’s things like our mortgages and our retirement that are on the line.