WHEREAS:

AFSCME has long opposed diverting Social Security payroll contributions away from the traditional social insurance system -- where benefits are guaranteed by the "full faith and credit" of the federal government -- to fund risky retirement investment accounts; and

WHEREAS:

These privatized accounts are not only risky, but would also require $2 to $3 trillion in transition costs by 2040 -- additional money that would have to be added to the Trust Fund so the system could make promised payments to current beneficiaries while establishing investment accounts for younger workers; and

WHEREAS:

President George W. Bush appointed a 16-member commission in 2001, giving it a mandate to ensure Social Security's long-range solvency while also incorporating private investment accounts; and

WHEREAS:

The commissioners -- all known supporters of Social Security private accounts -- included former lawmakers, business executives and academics, but not a single member of Congress or representative from a labor, senior, disability or other public interest organization; and

WHEREAS:

The commission issued its final report last December, recommending three distinct plans for public debate -- each incorporating private investment accounts -- rather than a single plan that would be sent to Congress for a vote; and

WHEREAS:

The commission plans clearly state that guaranteed benefits would be reduced in direct relation to the amount of payroll contributions a worker diverts to an individual account, and that big infusions of general revenue would be required in order to cover transition costs; and

WHEREAS:

The three plans also featured other onerous cutbacks, including a provision to index benefits to inflation rather than wages -- the latter being the more generous and currently-used method -- and another that would link the formula for guaranteed benefits to life expectancy, requiring people to work longer in the future for the same benefits they'd receive at a younger age today; and

WHEREAS:

All the required benefit reductions would apply to disability and survivor benefits as well as retirement benefits; and

WHEREAS:

The official 2002 report of the Social Security Trustees, made up of President Bush's top cabinet officers, clearly states that the system will be able to pay all promised benefits until 2041, after which Social Security will experience a shortfall, but will still be able to cover 75 percent of promised benefits far into the future; and

WHEREAS:

The future shortfall is significant, but manageable, and can be corrected without the drastic changes the commission recommends - changes that would actually worsen Social Security's finances, as privatization's transition costs use up Trust Fund monies and cause the shortfall to appear 11 years earlier than now projected.

THEREFORE BE IT RESOLVED:

That this AFSCME International Convention reject the report of the President's Social Security commission, reiterate its opposition to carving out private investment accounts from Social Security, and reaffirm its faith in Social Security as the risk-free foundation of retirement income for nearly every American worker and the nation's premier system of income protection for America's working families; and

BE IT FURTHER RESOLVED:

That AFSCME oppose any effort to cut benefits, or increase eligibility thresholds and any effort to use trust fund surpluses for any tax cut and to examine increases in employers' tax rates and the payroll tax earning cap as a progressive method to improve the Social Security system and insure long term financial stability; and

BE IT FURTHER RESOLVED:

That AFSCME lobby President Bush and Congress to again lock the box and stop spending Social Security surpluses; and

BE IT FINALLY RESOLVED:

That this convention demand that, prior to the November congressional elections, every U. S. Representative and Senator state their position on privatization of Social Security.

SUBMITTED BY:

Carol Ann Loehndorf, President and Delegate
AFSCME Local 3041, Council 79
Florida

Raymond Markey, President and Delegate
Carol Thomas, Treasurer and Delegate
AFSCME Local 1930, Council 37
New York