Steve Savicki
02-24-2005, 08:54 AM
It's not surprising that newly crowned Democratic National Committee chairman Howard Dean wasted no time in creating a devil for his loyal followers to attack, but who would have thought that Satan himself had taken the form of veteran Louisiana congressman Jim McCrery of Shreveport?
McCrery, a quiet and understated man in the midst of a gaggle of natural-born showboats, just happened to be in the wrong place at the wrong time when Dean found himself in need of an enemy to promote. When he first came to Congress 20 years ago, McCrery was fortunate enough to hold on to a seat on the highly coveted House Ways and Means Committee though which all tax laws, including Social Security and Medicare taxes, must flow. That Ways and Means seat was first occupied by the late Joe Waggoner of Shreveport during the '50s and '60s, and every congressman from Northwest Louisiana since has managed to keep it.
McCrery immediately began to make Social Security and Medicare his specialty, and after many years of toiling on the backbench became chairman of the subcommittee of Ways and Means that considers laws affecting Social Security and Medicare. As luck would have it, it is in McCrery's committee that President Bush's privatization of Social Security plan will begin its arduous trek through the congressional process.
For better or worse, Howard Dean has chosen the privatization issue as his very first bone of contention with the Bush administration. Dean has formed an advocacy group called "Democracy for America." And over Social Security privatization, Democracy for America has drawn the proverbial line in the sand. DFA has launched a campaign which will attempt to defeat the Bush proposal allowing American taxpayers to place some of their Social Security taxes into private investment accounts.
Two weeks ago, the Associated Press bureau in Washington released a story in which McCrery was quoted as having some reservations about the Bush plan. But after some reported visits from White House envoys to McCrery's office on Capitol Hill, the committee chairman is now saying publicly that he favors the Republican plan as submitted by the President.
McCrery now denies he ever expressed doubts about the President's plan, but whether he did or not, he is quite obviously fully in the Bush corner now and that corner sits right in the middle of Howard Dean's crosshairs. The Campaign for America held a media conference call this week to blast McCrery for taking over $200,000 in campaign contributions from securities and banking interests over the last four years.
"McCrery can't possibly reach the people on Main Street when he's in the back pocket of Wall Street," DFA spokesperson Toby Chaudhuri told the teleconference of journalists, many of whom dutifully reported the bad news back to McCrery's constituents in Shreveport-Bossier. As if the negative free media wasn't enough, Chaudhuri announced that his organization will be spending "tens of thousands" of dollars on a negative television campaign in Shreveport attacking McCrery.
It is clear that Wall Street banking and brokerage firms stand to make a mint if the President's proposal passes intact. That's because unlike Social Security where money is managed by the government free of charge, Wall Street money managers generally charge a fee based on a percentage of the assets under management. Bush indicated in his State of the Union address that those fees would average less than 0.3 percent of assets. But even under that scenario, University of Chicago economist Austan Goolsbee calculates that the securities industry would reap $424 billion over the next 75 years.
At a more realistic 0.8 percent management fee, that $424 billion escalates to $940 billion over 75 years, a figure characterized by Goolsbee as "the largest windfall gain in American financial history."
It is clear than the banking and securities industry comprised the bulk of President Bush's largest givers during his recent successful reelection campaign, the most expensive campaign in the history of the world. Therefore, there is no question that the Bush proposal to privatize Social Security is a political payoff to the securities industry, a payoff of unprecedented proportion.
But the more important issue is whether a privatized Social Security system will produce positive results for today's Americans under 30 years old when, 35-40 years from now, those taxpayers/workers enter the retirement stream along with us old fogies.
Republican strategists like to think that the Bush plan appeals to younger voters, but Louisiana native and Washington political analyst Charlie Cook says the 20-somethings could care less. People under 30 have a hard time visualizing themselves at retirement age, according to Charlie, and so could care less at the moment. No, the political purposes of the President's plan are hard to see. What's easy to see is the payoff and who is getting it. It's the payoff that makes the plan suspect from the beginning. Howard Dean smells blood on this issue, and he very well may be right.
McCrery, a quiet and understated man in the midst of a gaggle of natural-born showboats, just happened to be in the wrong place at the wrong time when Dean found himself in need of an enemy to promote. When he first came to Congress 20 years ago, McCrery was fortunate enough to hold on to a seat on the highly coveted House Ways and Means Committee though which all tax laws, including Social Security and Medicare taxes, must flow. That Ways and Means seat was first occupied by the late Joe Waggoner of Shreveport during the '50s and '60s, and every congressman from Northwest Louisiana since has managed to keep it.
McCrery immediately began to make Social Security and Medicare his specialty, and after many years of toiling on the backbench became chairman of the subcommittee of Ways and Means that considers laws affecting Social Security and Medicare. As luck would have it, it is in McCrery's committee that President Bush's privatization of Social Security plan will begin its arduous trek through the congressional process.
For better or worse, Howard Dean has chosen the privatization issue as his very first bone of contention with the Bush administration. Dean has formed an advocacy group called "Democracy for America." And over Social Security privatization, Democracy for America has drawn the proverbial line in the sand. DFA has launched a campaign which will attempt to defeat the Bush proposal allowing American taxpayers to place some of their Social Security taxes into private investment accounts.
Two weeks ago, the Associated Press bureau in Washington released a story in which McCrery was quoted as having some reservations about the Bush plan. But after some reported visits from White House envoys to McCrery's office on Capitol Hill, the committee chairman is now saying publicly that he favors the Republican plan as submitted by the President.
McCrery now denies he ever expressed doubts about the President's plan, but whether he did or not, he is quite obviously fully in the Bush corner now and that corner sits right in the middle of Howard Dean's crosshairs. The Campaign for America held a media conference call this week to blast McCrery for taking over $200,000 in campaign contributions from securities and banking interests over the last four years.
"McCrery can't possibly reach the people on Main Street when he's in the back pocket of Wall Street," DFA spokesperson Toby Chaudhuri told the teleconference of journalists, many of whom dutifully reported the bad news back to McCrery's constituents in Shreveport-Bossier. As if the negative free media wasn't enough, Chaudhuri announced that his organization will be spending "tens of thousands" of dollars on a negative television campaign in Shreveport attacking McCrery.
It is clear that Wall Street banking and brokerage firms stand to make a mint if the President's proposal passes intact. That's because unlike Social Security where money is managed by the government free of charge, Wall Street money managers generally charge a fee based on a percentage of the assets under management. Bush indicated in his State of the Union address that those fees would average less than 0.3 percent of assets. But even under that scenario, University of Chicago economist Austan Goolsbee calculates that the securities industry would reap $424 billion over the next 75 years.
At a more realistic 0.8 percent management fee, that $424 billion escalates to $940 billion over 75 years, a figure characterized by Goolsbee as "the largest windfall gain in American financial history."
It is clear than the banking and securities industry comprised the bulk of President Bush's largest givers during his recent successful reelection campaign, the most expensive campaign in the history of the world. Therefore, there is no question that the Bush proposal to privatize Social Security is a political payoff to the securities industry, a payoff of unprecedented proportion.
But the more important issue is whether a privatized Social Security system will produce positive results for today's Americans under 30 years old when, 35-40 years from now, those taxpayers/workers enter the retirement stream along with us old fogies.
Republican strategists like to think that the Bush plan appeals to younger voters, but Louisiana native and Washington political analyst Charlie Cook says the 20-somethings could care less. People under 30 have a hard time visualizing themselves at retirement age, according to Charlie, and so could care less at the moment. No, the political purposes of the President's plan are hard to see. What's easy to see is the payoff and who is getting it. It's the payoff that makes the plan suspect from the beginning. Howard Dean smells blood on this issue, and he very well may be right.