From an email letter from Social Security Works, September 3, 2023:
Social Security is the most popular and effective program in America. That's why Wall Street has spent 40 years on an insidious campaign to undermine the people's faith in the system.
Think we're exaggerating? The right wing called for a "Leninist Strategy on Social Security" back in 1983. And reading it today, much of that strategy looks just like reality.
In 1983, Social Security was in a real crisis, but the system's popularity protected it from destruction, much to Wall Street's disappointment. Wall Street sees our Social Security system as a cash cow that they can't access. They would give anything to get their hands on Social Security's $2.9 trillion trust fund, which is instead invested in US Treasury bonds.
So Wall Street-funded conservative think tanks got to work, outlining a long-term strategy to chip away at the public's confidence in Social Security. And it was extraordinarily successful.
The right-wing Cato Institute published a plan in 1983 called a Leninist Strategy1, designed to "neutralize" elderly voters while continuing to undermine confidence for Social Security among the young. Their model was the Leninist movement's "success in isolating and weakening its opponents." (Yes, they really were taking cues from V.I. Lenin, even in the depths of the Cold War.)
The strategy had two main prongs: Make younger Americans lose faith that Social Security will keep its promise to them, and create an alternative in the form of private accounts that could be gambled on the stock market, similar to 401ks.
The strategy took a decade to be mainstreamed by the Republicans.
In 1988, a presidential candidate sharing their views about Social Security appeared on the scene. Former Delaware governor Pierre S. "Pete" du Pont IV, an heir to those who had thrown money at any FDR-hater they could find, sought the Republican nomination for president and ran on a platform of privatizing Social Security.
But George H. W. Bush won the Republican nomination and the election that year. As president, he showed his understanding of the program, when he said, "In my budget plan, I say we’ve got to control the growth of...mandatory programs, but set Social Security aside. It's not a welfare program. It's sacrosanct."
In 1994, the House of Representatives returned to Republican control for the first time in over 40 years, the first time since Eisenhower was president. The Republicans had run in support of the "Contract with America," drafted and promoted by Congressman Newt Gingrich (R-Ga.). Unfortunately for those opposing Social Security, the Contract with America expressed implicit support for the program by proposing only minor modifications.
However, in 1994, as the law had required since 1956, the Secretary of Health and Human Services appointed 14 members to serve on Social Security's quadrennial advisory council. The trustees had begun to project a long-term deficit in Social Security's financing occurring somewhere more than 35 years in the future. Included in the report was an appendix, entitled "Developments Since 1983," which addressed the causes of the projected shortfall. The appendix began by debunking the myth that the inexorable tide of aging baby boomers had anything to do with the projected deficit.
The report clarified: "the fundamental ratio of beneficiaries to workers was fully taken into account in the 1983 financing provisions and, as a matter of fact, was known and taken into account well before that."
The report then explained that the shortfall resulted from a variety of factors. By the time the advisory council reported, almost 31 million workers participated in 401(k) plans, which contained assets of over $1 trillion. As the stock market went up and up in the 1990s, these arrangements became more and more popular.
This was the opportunity the Leninist Strategy envisioned. More and more Americans were becoming used to private accounts for retirement income.
The Cato Institute, who had first called for this strategy, formed the Project on Social Security Privatization on August 14, 1995. A co-chairman of the project was José Pinero, the Pinochet minister of labor who had designed the Chilean system of private accounts. Just as supporters of private accounts had been doing since almost the moment Chile had privatized its Social Security program, Cato touted the Chilean system as a model for the United States, despite its decidedly mixed results.
The new right-wing project fueled privatization talk with publications and conferences. In less than a decade, the project could proudly boast that it had "published more than forty books, articles, and reports" criticizing Social Security and advocating private accounts.
During these years, Social Security produced large surpluses, as it had been projected to do when the 1977 and 1983 amendments had been enacted—but the federal deficit produced record deficits.
On March 7, 1999, the wealthy governor of Texas had announced that he was forming a committee to explore a run for the presidency. Despite his limited political experience and his weaknesses as a speaker, he had one huge asset. He happened to be the son of a former president, and the two men shared the same first and last names, George Bush.
Well before Bush formed his exploratory committee, he had been thinking about the presidency and had been thinking about Social Security, as well. He had a long history of hostility to the program. As a student at the Harvard Business School in the early 1970s, he had railed against Social Security and other New Deal programs. In his losing bid for a congressional seat in 1978, he had ventured that "people [should] be given the chance to invest [Social Security] the way they feel."
The patience of the anti-Social Security forces seemed to have paid off. They finally had a president who seemed to see the world their way.
Despite Social Security's absence from the campaign, President Bush established a presidential commission on May 2, 2001, to study and make recommendations about Social Security.
Naturally, the members consisted only of people who were dedicated to destroying Social Security's universal promise, and it resulted in Bush's privatization scheme.
Unlike most presidential commissions, which are given broad guidelines within which to work, this commission was to be tightly constrained. Among the stipulations dictated by Bush was that the commission's recommendations "must include individually controlled voluntary personal accounts." It was not a commission to consider what should be done; rather, it was a commission to advise the president how to do what he had already made up his mind to do.
At the same time, Bush used the administration of government to sow distrust in Social Security. Though Trustees Reports between 2001 and 2004 grew slightly more optimistic, with the projected year of exhaustion of the trust funds slightly further into the future, Social Security Administration publications became more alarmist. No longer confirming that Social Security faced "no immediate crisis," the publications now warned that the program was "unsustainable," and "underfinanced."
Most disturbing was the change in the annual statement sent to all of the 125 million workers age 25 and over who pay into the trust funds. This statement, completely unsolicited, simply arrives in each worker's mailbox. The 2001 statement proclaimed, "Will Social Security be there when you retire? Of course it will."
This reassurance was gone by 2002, and in 2005, the unsettling remark "Congress has made changes to the law in the past and can do so at any time" was now in the mailing, just in case workers were feeling too secure.
The same tactics are being used today: Republicans in Congress are systematically underfunding the Social Security Administration, forcing office closings and longer wait times to receive the world class service Americans are promised.
George W. Bush set the agenda for today's Republicans: Pass a massive tax cut, and then try to cut Social Security in the name of fiscal discipline.
This isn't a new fight—it is the same thing we have been fighting for nearly a century. With our voices together, we beat Bush's privatization scheme, we beat President Obama's fiscal commissions, we beat Paul Ryan's supercommittees, and we beat Donald Trump's defunding attempt.
Now, Republicans are holding the global economy hostage in exchange for unspecified budget cuts. While many of them claim not to have Social Security and Medicare in their sights at the moment, they are also quick to feed the same false narratives that the Leninist Strategy demands.
The way we win is to go on offense: We need to EXPAND Social Security, never cut it.
We're rallying members of Congress behind a bill to expand our Social Security system, which will protect and expand benefits for millions of Americans and keep Social Security strong through the 21st century and beyond!
Thanks,
Nancy Altman
Social Security Works
1 https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1983/11/cj3n2-11.pdf
September 3, 2023