Ben Smith reports in today's New York Observer that while the Empire State's two Democratic Senators remain staunch foes of President Bush's plan to partially privatize Social Security, other Democrats in NYC have already transferred all of their funds into private accounts. Not only have they seen their investments grow, but at least one of them plans to demand full Social Security benefits despite not having paid into the system:

The New York City program, which replaces Social Security entirely, goes much further than the "personal accounts" that President Bush has been pushing, which would be only a partial substitute for Social Security. New York’s program has existed for more than a decade without attention or controversy, despite offering a useful counterpoint to the deeply polarized national debate. It is available to about 20,000 city government managers, political appointees and elected officials, although relatively few take advantage of it.

Mr. Bush’s proposal to overhaul Social Security has been blocked by a united front of Senate Democrats, with New York’s Hillary Clinton recently denouncing the plan as a "risky privatization plan."

Here in Mrs. Clinton’s back yard, however, the experiment with private accounts is hidden in plain sight at City Hall. The experimental subjects include four Democrats in the firmly anti-privatization City Council, including Brooklyn’s David Yassky and Oliver Koppell of the Bronx. Many other participants are younger political appointees like Robert Capano, until recently an aide to Brooklyn Borough President Marty Markowitz.

David Yassky makes no apologies for participating in the program he opposes for the rest of the country. In fact, he is so unapologetic that he has decided to stick it to the US when it comes time to retire, since he feels that the rest of the country is so "unfair" to New Yorkers:

Mr. Yassky said that between the Social Security tax he’d paid in previous jobs, and the tax he will pay in the future, he expects to receive the maximum Social Security benefit despite not paying in during his time in the City Council.

"It’s a free ride," he said, adding that he wouldn’t criticize a plan that effectively increased the income of New York City workers in his position. "The federal government is so unfair to New York in so many other ways, when there’s something that is a disproportionate benefit to New York, I’m not going to get too outraged about it."

As Smith notes, none of these workers enrolled in the completely-privatized plan have experienced poverty as a result. In fact, their rate of return has been significantly higher than anything possible with Social Security, plus they own their investments and can pass them to family after their death. That flies in the face of doomsayers who claim that Bush's private accounts will create mass poverty among the elderly in twenty years -- as if Social Security alone keeps people above the poverty line now.

Nor is NYC alone. Galveston, Texas has much the same system, which produces much the same results, as the GAO discovered. Lower-income workers tended to do better under Social Security, as the amount of their investments were smaller and the return was not substantially better. However, they have the choice to stay with Social Security, whereas now no one outside of these two programs have that choice.

Perhaps Hillary Clinton and Charles Schumer can explain why they want to deny Americans across the country the same choice given to political officials in their power base. I'd be very interested in hearing that explanation on the floor of the Senate when the privatization bill comes up for debate.

Trackback Pings

TrackBack URL for this entry is

Listed below are links to weblogs that reference Look Who Gets Social Security Choice:

» Social Security and Equal Treatment from Pete The Elder
One of my biggest problems with social security is that it is not optional for most people, but is optional for some government workers. Teachers in some school districts in Texas for instance can opt out of it and participate... [Read More]

Tracked on March 18, 2005 3:14 PM