From Rep. Charles B. Rangel
Ranking Democrat, Committee on Ways and Means
CONTACT: Matthew Beck, 202-225-3526 or Candice Jones, 202-226-3354

February 6, 2006               

Bush Continues Social Security Privatization Crusade

FY 2007 Budget seeks $712 billion for private accounts, would slash $6.3 billion in benefits

WASHINGTON, DC - Ways and Means Ranking Member Charles B. Rangel issued the following statement in response to President Bush's proposal to spend over $712 billion to begin privatizing Social Security.  The President's Fiscal Year 2007 Budget, released today, continues his push for private accounts while slashing over $6.3 billion in Social Security benefits. 

"The President's budget outlines his plan to privatize Social Security in no uncertain terms," said Ranking Member Rangel.  "The $712 billion price tag and $6.3 billion in benefit cuts Bush proposes are just the tip of the iceberg.  To be honest, this isn't what I expected from a President who, just last week, suggested that Democrats and Republicans should hold hands and work this thing out.  How can we take the President's offer at face value when his budget clearly tells us that, at the end of the day, he wants to privatize Social Security?"

The budget details the President's plan to divert billions from the Social Security Trust Fund to pay for private accounts and to cut middle-class benefits (Budget of the U.S. Government, pp. 19, 286).  The Budget also reveals the initial cost of privatization.  In the first year of the proposal, 2010, the private accounts would cost the Trust Fund $24 billion, jumping to a $57 billion price tag for the second year of the plan. 

The cost of privatization over the ten-year budget window (2007-2016) is $712 billion.  (Budget of the U.S. Government, Table S-6, p. 321).