Voters’ Attitudes Toward Social Security Reform HART RESEARCH P e t e r D ASSOTESCIA Key findings from surveys among 1, presidential election voters, Conducted January 6 – 11, 2005 for AFL-CIO

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Top Priorities For Congress And The President One/two issues that should be Congress’/President’s highest priorities Health care Jobs/ economy Social Security Education Budget deficit Reduce taxes Lawsuit reform Age 18-49: 20% Age 50/over: 37%

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Dwindling Support For Private Accounts Do you support or oppose a plan in which people could invest some of their Social Security contributions in the stock market? Trend source: ABC News/Washington Post surveys

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Voters Assess The Financial Condition Of Social Security Looking ahead, how would you describe the financial condition of Social Security? Basically secure Faces major troubles Faces a crisis Assessment has improved slightly since 1998, when 27% said SS was secure/ faced minor troubles. Faces minor troubles

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Why Is Social Security In Trouble? Top one/two reason Social Security might face financial problems in future Government has used trust fund for other purposes Large number of Baby Boomers retiring soon People living longer after retiring Bush tax cuts reduced revenue/increased deficit Social Security payroll taxes not keeping up with costs Benefits to retirees are too high

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Age Working Americans’ Confidence In Their Own Benefits Age 50/over

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Why Is Social Security Valuable? Top one/two reason Social Security is valuable and important Benefit people earn by paying in, not a handout Safety net that keeps retirees out of poverty Guaranteed income that can never be taken away Promise that must be kept Foundation of a secure retirement Social contract that all Americans support

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Top Goals For Social Security Top Priorities for Congress in Dealing with Social Security Provide benefits people paid for Strengthen Social Security Modernize Social Security Reform Social Security Preserve Social Security Leave Social Security alone Privatize Social Security 31% 30% 25% 23% 17% 14% 11%

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Declining Bush Approval On Social Security March 2001 Source: Gallup, ABC News/Washington Post January % of Bush voters lack confidence in Bush on SS issue.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Strongly favor 13% 39% 46% Somewhat favor Somewhat oppose Strongly oppose 32% Not sure Initial Support For Bush Plan Knowledge of Plan Great deal Fair amount Little/none 17% 40% 43%

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Informed Support For Bush Plan Strongly favor 12% 40% 54% Somewhat favor Somewhat oppose Strongly oppose 35% Not sure Main Provisions of Bush Plan  Workers age 55 and younger allowed to place one-third of payroll taxes in voluntary private investment accounts.  Guaranteed monthly benefit for future retirees reduced in steps by 30% to 50%, depending on whether they choose private account.  No change in benefits for people over age 55.  Long-term SS funding shortfall eliminated, but government will borrow $2 trillion to fund transition costs.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Variations In Support For Bush Plan All voters Men Women Age 18 to 34 Age 35 to 49 Age 50 to 64 Age 65/over Whites African Americans Hispanics Support 40% 46% 35% 47% 43% 37% 32% 43% 20% 40% Oppose 54% 50% 57% 48% 53% 58% 59% 51% 74% 55% Democrats Independents Republicans When I retire, SS benefits will be: Same as now/ somewhat lower Much lower/none SS is a priority Support 12% 32% 74% 40% 46% 36% Oppose 85% 60% 20% 57% 48% 58%

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Opportunity To Win Back Key Groups White womenNon-college white women White seniors Non-college educated whites

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Political Impact Of Voting For Bush Plan If my member of Congress voted for Bush’s Social Security plan: I would be MORE likely to vote for him/her in next election It would make no difference to me either way I would be LESS likely to vote for him/her in next election

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Wait For Better Plan Should Congress act this year? Congress should wait and develop a different plan for Social Security Congress should pass Bush plan

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Options To Strengthen Retirement Security Tax-free retirement savings options, separate from SS Have Congress repay money it took from SS trust fund Repeal Bush tax cuts for wealthiest 1%, give to SS Maintain inheritance tax for $3 million/more, give to SS Payroll tax on first $190,000, not $90,000 as is now 82% 73% 65% 58% 60%

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Options To Strengthen Retirement Security Reduce benefits for future retirees w/over $50K Small reduction in COLA for benefits Raise eligibility age for full benefits to 70 39% 26% 37%

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Responses To “Crisis” Claims 37% 55% SUPPORTERS say that Congress should pass the Bush plan because the current Social Security system is unsustainable, and we must take action now to avert a crisis later. Agree with supporters Agree with opponents Agree with supporters Agree with opponents 41% 53% THOSE OPPOSED to the plan say that Social Security faces problems but not a crisis, and making modest changes will preserve benefits for future retirees--we do not need the radical changes proposed by Bush. THOSE OPPOSED to the plan agree that we must address Social Security's problems, but say that this plan makes those problems even worse by diverting trillions of dollars from the trust fund and weakening the system

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Private Accounts Vs. Benefit Cuts SUPPORTERS [of Bush plan] say that private investment accounts will be a good deal for younger workers because they provide a higher rate of return on payroll taxes and let people control their own money. THOSE OPPOSED to the plan say that Social Security is designed to provide a guaranteed monthly benefit you can count on--there are places for risk in retirement savings, but Social Security is not one of them. +14 SUPPORTERS say Social Security is underfunded by $10 trillion and will never make good on its promises. There is simply no alternative to reducing benefits in the future, and the Bush plan makes up for those cuts by providing private investment accounts. THOSE OPPOSED to the plan say that people deserve to receive the Social Security benefits they paid for. Congress should repay the trust fund and strengthen Social Security so it can pay the promised benefits, not cut benefits. +25

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Concerns about Bush Plan  Benefit cuts and risky accounts  $2 trillion in borrowing  Corruption and waste

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Impact Of Benefit Cut Messages Many seniors would end up in poverty if their private investment account did not do well, and they would have to be taken care of by the taxpayers The private investment accounts are supposed to be voluntary, but the plan cuts your benefits by 30% even if you do not choose a private account, and that is not fair The average retiree would lose a total of $134,000 in benefits under this plan if they live for 20 after they retire For every dollar you have in your investment account when you retire, the plan would deduct about 50 cents from your retirement benefits – this is a bad deal Private accounts undermine the basic purpose of Social Security, which is to provide a guaranteed, risk-free base of retirement income Persuadable voters who say each is a very serious concern 75% 74% 72% 64% 46% Cutting survivor benefits (69%) and disability benefits (66%) are also serious concerns.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Impact Of Deficit Cost Messages The government would have to borrow $2 trillion, mainly from countries such as China and Japan, to fund this plan. The health of Social Security should not depend on the willingness of foreign countries to lend us money Under the Bush plan, the Social Security trust fund actually would run out of money 14 years sooner than is now expected. It makes Social Security's funding problems worse, not better 76% 62% Persuadable voters who say each is a very serious concern Debating Deficit Impact: “It is irresponsible to add $2 trillion in new debt with the deficit already so high – Social Security needs solid funding, not more IOUs” (66% agree). “It is all right to borrow money in the short-term to fund this plan, because it solves the much larger long-term fiscal problem of Social Security being underfunded” (21% agree).

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Impact Of Corruption/Waste Messages The government will decide which Wall Street firms get to manage the private investment accounts and make billions of dollars in profits. Those decisions will be based on political influence, not what is best for average people Having the federal government administer 125 million individual accounts will create more bureaucracy and administrative costs that will reduce retirement benefits The administrative costs of private accounts and fees for the big Wall Street companies that manage them will reduce earnings on the private accounts by about 20% 75% 55% 39% Persuadable voters who say each is a very serious concern

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Final Verdict On Bush Plan Initial ViewFinal View Non-college women Age SS in crisis 69% 58% 57% Oppose

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Conclusions: Play Offense, Not Defense  Voters come to the debate already skeptical about privatization – especially those voters who care most about Social Security – and there are clear opportunities to strengthen and deepen their doubts.  It is important to take the offensive and define this plan in the public mind now, not wait to respond to the coming Bush PR offensive.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Conclusions: Framing the Debate  DON’T debate this at the level of philosophy -- “ownership society” vs. “social insurance.”  DO focus on the real, concrete harm to Americans’ retirement security done by the Bush plan.  DON’T get caught up in debating the size of the problem.  DO focus on how Bush plan makes problem worse and weakens Social Security.  DON’T focus all your attention on “risk” of accounts.  DO tell Americans about huge benefit cuts in plan.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Conclusions: Focusing Our Message  The Bush plan undermines retirement security by cutting guaranteed benefits 30% to 50%, even for those who don’t choose an account. Risky privatization accounts won’t make up the difference. Working people should get the benefits they paid for.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Conclusions: Focusing Our Message  The Bush plan would hurt our economy and pass huge new bills onto future generations of workers by borrowing $2 trillion from China, Japan, and other foreign nations. Social Security needs solid funding, not more IOUs.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Conclusions: Focusing Our Message  Social Security does face problems, but the Bush plan makes the problem worse and weakens Social Security by diverting trillions of dollars from the trust fund.  We can strengthen Social Security without slashing benefits: Require Congress to pay back the money it has diverted from Social Security and create new opportunities for Americans to have tax-free savings for their retirement in addition to Social Security.

Voters’ Attitudes toward Social Security Reform/Hart Research for AFL-CIO Conclusions: The Bush Plan is a Fraud Be aggressive in telling Americans that Bush is selling them a bill of goods:  It’s not voluntary – benefits cut either way  Don’t get to keep all your gains – 50% tax  Cannot pass on to heirs – must annuitize  Don’t ‘control your own money’ – politicians will pick firms to control the accounts, a process corrupted by politics