TV Spot Challenges Sununu's Support for Privatization
Date: 10/15/02 Source: Campaign For America's Future

Concord, NH: On Tuesday, a coalition of New Hampshire citizen leaders joined with the Campaign for America's Future to release a new report about Social Security legislation co-sponsored by John Sununu in the 106th Congress. The Sununu bill proposed mandatory private Social Security investment accounts for all workers under the age of 55, accompanied by a mandatory reduction in Social Security's guaranteed benefits.

The Campaign for America's Future has also joined with local groups to air TV spots in New Hampshire designed to alert citizens to John Sununu's support for privatization.

Throughout his campaign for the U.S. Senate, John Sununu has sought to deflect attention from his support for diverting Social Security funds into private investments, an approach that both Republicans and Democrats have called "privatization" for decades. For example, Sununu has sent mailings to New Hampshire voters, promising he will "never let any risky privatization scheme endanger the benefits you have earned!" Sununu has also stressed that he only supports "voluntary" private accounts.

Until the release of this report, however, the question of Mr. Sununu's support for this particular legislation had not been raised. The groups revealed that, while in Congress two years ago, Sununu co-sponsored a bill that would have required workers to invest a portion of their own Social Security taxes. The private accounts, which would have been mandatory for workers under age 55, would trigger large reductions in Social Security's guaranteed benefits, causing many workers to lose income.

The Campaign for America's Future report, written by Hans Riemer, a senior policy analyst at the Washington based organization, draws upon an evaluation of the legislation conducted by the Social Security Administration actuaries. The report also revealed that Sununu's legislation would have caused Social Security to run out of funds as soon as 2032, seven years earlier than otherwise projected at that time. The Social Security benefit cuts that would be required to close the shortfall that remained under the Sununu plan would exceed twenty percent, while many workers would lose much more as a result of the private account scheme.

Roger Hickey, co-director of the Campaign for America's Future, said, "The next Congress is going to vote on whether to partially-privatize Social Security. New Hampshire citizens need to think twice about sending John Sununu to the Senate to vote on the future of Social Security when he has already endorsed legislation to partially-privatize Social Security.

"While Sununu has sought to back-pedal on partial-privatization by saying that the accounts would be 'voluntary,'" Hickey continued, "the legislation he co-sponsored in 2000 made private investment of Social Security, as well as benefit cuts, mandatory. Sununu's contradictions about whether his accounts and corresponding cuts would be voluntary or mandatory raise serious questions about whether he can be trusted to protect Social Security for the future. Diverting Social Security funds into private accounts will force benefit cuts by draining the Trust Fund - that is just the wrong way to go."

The TV spots aired by the Campaign for America's Future also present information on the financial support Sununu has received from the securities and investment industry, companies which stand to benefit financially from the proposals Sununu has supported. Speaking at the press conference was David Donnelly, director of the Reform Voter Project, a group that supports comprehensive campaign finance reform. According to analysis by the Reform Voter Project, securities and investment firms, such as Goldman Sachs and Morgan Stanley, have contributed $117,160 to Rep. Sununu's campaigns since 1995. These contributions came from corporate PACs and from corporate executives and their family members each giving $200 or more. Nearly two-thirds of that campaign cash-$74,500-has flowed into Sununu's campaign coffers for his 2002 Senate race.

Wall Street firms stand to reap enormous profits if any portion of Social Security is diverted into private accounts. According to an article in the Wall Street Journal about President Bush's push for partial-privatization, "a range of financial-services firms are pooling their efforts, and millions of dollars for advertising, to assist [Bush] in raising public concern about the retirement program's woes. But the ad dollars are a pittance compared with the billions at stake for Wall Street should Mr. Bush achieve his goal of carving private accounts from Social Security." [Wall Street Journal, June 12, 2001]

Also speaking at the press conference in Concord were Mark MacKenzie, President of the New Hampshire AFL-CIO and Jean Wallin, New Hampshire Women's Lobby and former member of the New Hampshire Legislature. They are leaders of a variety of New Hampshire organizations that have asked all New Hampshire candidates for House and Senate to sign a Pledge promising not to divert Social Security taxes or cut guaranteed benefits in order to fund private accounts in Social Security.

Jean Wallin said, "John Sununu is trying to mislead seniors by sending them mailings that say he opposes 'privatization' - but this report exposes the fib. He supports private accounts that will undermine Social Security. If he really opposes privatization as he says, why won't he sign our Pledge?"

Gov. Jeanne Shaheen, and House of Representatives candidates Martha Fuller Clark and Katrina Swett have signed the Pledge, but Sununu as well as Rep. Charles Bass and House candidate Jeb Bradley have refused to sign. [See www.signthepledge.org.] Mark MacKenzie said, "Sununu, Bass, and Bradley all support creating private Social Security investment accounts, which will increase risk and cut guaranteed benefits. They are trying to hide their support for the plan during this election by playing word games about what the definition of privatization is, but they'll vote for it in the next Congress and New Hampshire retirees will be harmed."

For years, both Republicans, Democrats, and independent experts and advocates have used the term "privatization" or "partial privatization" to describe any proposal that would use Social Security money for private investments. For example, Karl Rove - top advisor to the Bush administration - has used privatization to describe private accounts. Discussing VP nominee Dick Cheney's qualifications in a CNN interview during the 2000 campaign, Rove said, "On Social Security privatization, encouraging private personal retirement accounts, Cheney was for them." [CNN, 8/13/00]

1 John Sununu was one of 39 Members of Congress to co-sponsor a Social Security privatization plan written by Representative Mark Sanford (R-SC), H.R. 4839 in the 106th Congress.

2 Note on sources: All campaign finance figures are based on Reform Voter Project analysis of campaign finance data provided by the Center for Responsive Politics (www.crp.org), a nonprofit, nonpartisan research organization which downloads contribution data from the Federal Election Commission monthly and codes contributions by industry. Data for the 2002 election cycle were downloaded in September 2002.