Only Big Finance Benefits from PIAs

Bush and his advisers know they could correct the alleged Social Security shortfall through modest increases in the payroll tax for wealthier taxpayers; an extension of the estate tax; or simply reversing Bush’s projected $11 trillion tax cuts for millionaires through 2042.

But the administration’s objective is just the opposite —a totally privatized retirement system that benefits corporate interests. Diverting payroll taxes to PIAs will generate what are called “transition costs” of around $2 trillion over the coming decade and lucrative fund management charges.