Last Tuesday President Biden drew jeers from many Republicans in the audience during his State of the Union address when he said some of those lawmakers are aiming to cut Social Security and Medicare. Amidst the GOP taunting, the President added “Anybody who doubts it, contact my office. I’ll give you a copy of the proposal.”

Although Biden assured the audience and the American people that these programs will not be at risk, there is still good reason to be worried. Perhaps the biggest concern is the proposal to privatize Social Security. 

Former Vice President Mike Pence said last week that he wants to “reform” Social Security and transition it to private savings accounts for recipients. He said in an interview, “I think the day could come when we could replace the New Deal with a better deal. Literally, give younger Americans the ability to take a portion of their Social Security withholdings and put that into a private savings account.”

GOP Utah Senator Mike Lee agreed, stating “I think, we oughta look to, after we get it solvent, look to the idea of allowing people, if they want to, to at least identify some portion of their social security payments to go into a private account.”

The idea of privatizing Social Security is nothing new. Since George W. Bush, Republican politicians have floated the idea of privatizing government programs such as Social Security and Medicare, and each time it’s been voted down. The problem with this idea is that privatization would require every American to move their Social Security funds out of the guaranteed government fund and into the stock market and private bonds. If you’re familiar with the stock market or have an IRA or a 401K, you know that your returns fluctuate depending on the market, and a steady rate of return is not always guaranteed.

Currently, Social Security checks are guaranteed by the government, and the amount of each check keeps up with the cost of living. Stocks and Bonds aren’t so forgiving. For example, as COVID-19 spread across the world shifts in global economies were triggered by massive selloffs, major stock indexes plummeted, and the DOW saw its biggest one-day drop since “Black Monday” in 1987. If Social Security had been privatized during this time how many millions of dollars would Social Security recipients have lost? And what would federal and local governments do to make up for those losses? The ramifications would no doubt lead to increases in Americans’ payroll taxes, and trillions of dollars of federal borrowing.

Voters overwhelmingly oppose GOP efforts to privatize Social Security, with 77% of voters (79 % being Democrats, 74% Independents, and 76% Republicans) thinking the US should leave Social Security as is. Only a meager 15% of voters think Social Security should be privatized.

So why do GOP lawmakers keep bringing up the privatization of Social Security? They claim that privatization can lift the rate of return workers receive on their retirement contributions, boost national savings and future economic growth, and is more economical than trying to rescue Social Security with higher payroll taxes. 

I don’t buy it. The real reason is to benefit Wall Street. 

Brokerage houses, mutual funds, and banks stand to gain gigantic fees if billions of dollars are shifted each year from Social Security payments into their managed account. Those fees would come from balances in individual brokerage accounts (which would be collected no matter what the market is doing). As a result, privatization would ultimately favor Wall Street and the rich at the expense of the poor and working class.

Social Security is a contractual agreement between working Americans and the United States Government and protects retirees from the risks of poverty in their golden years. Millions of Americans have labored and struggled all their lives to look forward to a decent standard of living and dignity when they retire. Privatization puts this safety net at risk.