On the campaign trail, Hillary Clinton tried to fire up her supporters, saying:
“After Bush got reelected in 2004, the first thing he said was, let’s go privatize Social Security. … And you know what, their whole plan was, their plan was to give the Social Security trust fund to Wall Street. Imagine that.”
Yes, imagine that.
Now, you can go either way with her claim about President George W. Bush. Yes, President Bush proposed voluntary personal retirement accounts for Social Security. Under the Bush plan, workers could choose to have some of their Social Security payroll taxes contributed to a personal account similar to a 401(k). And those workers could also choose, if they liked, to invest some of those personal account contributions in a broad stock index fund that would be managed by a government entity similar to the Thrift Savings Plan for federal government employees. Would the trust fund itself have been given to “Wall Street”? No. Would President Bush have forced anyone to give any of their Social Security dollars to “Wall Street”? No. But if you don’t want Social Security funds to have any risk, then you might excuse Mrs. Clinton for her shorthand description of the Bush proposal.
But guess who did want to give the Social Security trust fund to Wall Street, as in having part of the trust fund itself invested in stocks? Oh, what’s his name again? President Bill Clinton! Back in 1999, President Clinton proposed investing about 15% of the Social Security trust fund in the stock market.
If those stock market investments paid off then Social Security’s solvency would have been extended. If those investments didn’t pay off – and things have been a bit rocky for the stock market over the past 15 years or so – then Social Security’s solvency would have been hurt. And if the trust fund goes insolvent then by law retirees’ benefits get cut.
And guess what? Unlike the Bush plan, there was no room for choosing under the Clinton proposal to invest the trust fund in stocks. Individuals couldn’t opt out and they couldn’t choose to have their money invested in bonds rather than stocks, as they could have under the Bush plan.
Did Hillary oppose Bill’s idea to invest the trust fund in stocks? Does she even remember it?