Bachmann: Social Security A ‘Tremendous Fraud’ (VIDEO)


Appearing on the Fox Business Network last night, Rep. Michele Bachmann agreed that Social Security is a “tremendous fraud” — for a very interesting reason.

Fox Business host David Asman complained that Social Security should have been treated as a “lockbox,” and not have its tax revenues raided for other federal programs — exactly the sort of thing for which Al Gore was made fun of by Republicans in 2000, when they were pushing privatization. “Social Security, I think, it is one of the biggest frauds ever perpetrated on the American public. It is supposed to be a lockbox — a personal safety deposit box for our savings,” said Asman. (Much of this is not true, see fact-check below.) “That’s how it was designed, that’s what it was promised to be. Instead, that box is empty, it’s full of these empty IOUs that politicians have put into it, and they’ve taken the money out and used it for other things.”

“You’re right, it’s a tremendous fraud. No company could get away with this, they’d be thrown in jail if they ever tried to do what the federal government did with people’s Social Security money. What we need to do very quickly is take the money that is coming in for Social Security, and truly lock it up so that we aren’t putting it out the door anymore,” said Bachmann — who then transitioned to promoting privatization.Note that much of what was said above about the nature of Social Security is not true. Asman makes it sound like it was a system of personal savings accounts all along. It has never been such a thing — it has always been a public pension system funded out of taxes on current wage-earners, under the social guarantee that when they retired there would be new workers who would in turn pay into the system. Also the bit about “empty IOUs” refers to the federal government issuing treasury bonds to the Social Security Administration in exchange for money taken from the system. Bonds are legally required to be paid off with future tax revenues — and cannot be “empty,” because debt repudiation by the government is illegal under the 14th Amendment.

She explained: “But this — ultimately what we have to do is cut government spending at almost every level, and we’ve gotta get our house in order. We need entitlement reform with Medicare and with Social Security. There’s plans on the table right now. There’s a roadmap that I think all of us need to look at. This is a top priority, because there are people who are truly vulnerable who are going to be hurt if we don’t get this house in order.”

Bachmann explained what privatization could look like, in a more toned down phrasing than her previous statements. “Well, we need to do, like you said, is people who are currently on Social Security need to have the promise kept to them. Also, people within about ten years of receiving Social Security, they’re in a very difficult position,” said Bachmann. “But people that are younger than those ages, they need to have some options in their lives, so that going forward they can have an ownership of their own Social Security, their own retirement.”

Bachmann had previously said: “So, what you have to do, is keep faith with the people that are already in the system, that don’t have any other options, we have to keep faith with them. But basically what we have to do is wean everybody else off. And wean everybody off because we have to take those unfunded net liabilities off our bank sheet, we can’t do it.”

“Wean everybody off,” and “take those unfunded net liabilities off our bank sheet,” do sound quite a bit different from “have some options.”