Want Fries with that Whopper?

This is a very old tactic; if you can't convince with rhetoric, use scare tactics.

FACTCHECK.ORG

Obama's Social Security Whopper

He tells Social Security recipients their money would now be in the stock market under McCain's plan. False.

By Brooks Jackson | factcheck.org

Sep 20, 2008 | Updated: 6:20 p.m. ET Sep 20, 2008

Summary

In Daytona Beach, Obama said that "if my opponent had his way, the millions of Floridians who rely on it would've had their Social Security tied up in the stock market this week." He referred to "elderly women" at risk of poverty, and said families would be scrambling to support "grandmothers and grandfathers."

That's not true. The plan proposed by President Bush and supported by McCain in 2005 would not have allowed anyone born before 1950 to invest any part of their Social Security taxes in private accounts. All current retirees would be covered by the same benefits they are now.

Obama would have been correct to say that many workers under age 58 would have had some portion of their Social Security benefits affected by the current market turmoil – if they had chosen to participate. And market drops would be a worry for those who retire in future decades. But current retirees would not have been affected.

Analysis

In our "Scaring Seniors" article posted Sept. 19 we took apart a claim in an Obama-Biden ad that McCain somehow supported a 50 percent cut in Social Security benefits, which is simply false. Then, on Saturday Sept. 20, Sen. Barack Obama personally fed

senior citizens another whopper, this one a highly distorted claim about the private Social Security accounts that McCain supports.

What Obama Said

In Daytona Beach, Florida, Obama said in prepared remarks released by the campaign:

Obama, Sept. 20: "And I'll protect Social Security, while John McCain wants to privatize it. Without Social Security half of elderly women would be living in poverty - half. But if my opponent had his way, the millions of Floridians who rely on it would've had their Social Security tied up in the stock market this week. Millions would've watched as the market tumbled and their nest egg disappeared before their eyes. Millions of families would've been scrambling to figure out how to give their mothers and fathers, their grandmothers and grandfathers, the secure retirement that every American deserves. So I know Senator McCain is talking about a 'casino culture' on Wall Street - but the fact is, he's the one who wants to gamble with your life savings."

That's untrue. All current retirees would be covered by exactly the same Social Security benefits they are now under what the Obama campaign likes to call the "Bush-McCain privatization plan," which Bush pushed for unsuccessfully in 2005.

Who Would Have Been Affected
As the White House spelled out at the time, on page 5 of the document titled "Strengthening Social Security for the 21st Century," released in February 2005:Disappearing nest eggs?
Also worth noting here:
The private accounts would have been voluntary. Anybody fearful of the stock market's risk could simply stay in the current system.

Obama's reference to "casino culture," disappearing "nest eggs" and gambling with "your life savings" are also misleading exaggerations. Only a little over one-fourth of any workers' total Social Security taxes could have been invested (a maximum of 4 percent of taxable wages, out of the total 15.3 per cent now paid, split equally between worker and employer.)

http://www.newsweek.com/id/160179