Treasury Secretary Bessent under fire over Social Security comments

Axios

5 days ago

Scott Bessent kicked a hornet's nest Wednesday when he said that new Trump accounts for children were "in a way, a backdoor for privatizing Social Security."
Why it matters: The Treasury Secretary is just the latest member of the Trump administration to touch the third rail of American politics, making comments that give political opponents fuel for criticism and worry advocates for Social Security.
State of play: Bessent was interviewed at an event in Washington, hosted by right-wing news site Breitbart.
He was talking about the new Trump accounts, established by the "big, beautiful bill," now law. Each baby born from 2025 - 2028 in the U.S. gets an account with $1,000, to be invested in low-cost index funds.
Echoing the administration's talking points, Bessent said the accounts would help teach financial literacy to American kids.
Then he stepped in it.
"In a way, it is a back door for privatizing Social Security," he said. "Social Security is a defined benefit plan paid out. To the extent that if all of a sudden these accounts grow, and you have in the hundreds of thousands of dollars for your retirement, then that's a game changer."
The criticism started flowing shortly afterward. "The Trump administration is plotting to privatize Social Security," warned a statement from Nancy Altman, president of Social Security Works, a nonprofit focused on protecting the program.
"First, he gave Elon Musk the power to gut the Social Security Administration. Now, Trump's Treasury Secretary has said the quiet part out loud. He is bragging about the administration's goal to privatize Social Security."
"You know what privatize means?" Senate Minority Leader Chuck Schumer (D-NY) said Wednesday. "It means you're in trouble, Mr. and Mrs. Senior Citizen."
Flashback: An effort to privatize Social Security during President George W. Bush's administration was met with fierce blowback. Since then, suggesting any big changes or hinting about privatization has been seen as politically toxic.
The other side: Bessent quickly clarified his remark on X.
"Trump Baby Accounts are an additive benefit for future generations, which will supplement the sanctity of Social Security's guaranteed payments," he wrote. "This is not an either-or question: Our Administration is committed to protecting Social Security and to making sure seniors have more money."
Toward the end of an interview with CNBC on Thursday, he said: "The compounding is going to be an incredible supplement to Social Security, not a replacement."
Catch up quick: The White House has said repeatedly that it has no plans to disrupt Social Security benefits, but statements from top officials and actions, particularly from DOGE, have generated a lot of concerns.
Commerce Secretary Howard Lutnick sparked a wave of backlash in March, when he said seniors wouldn't complain if they missed a Social Security check.
Elon Musk during his DOGE heyday called the program a Ponzi scheme.
Meanwhile, the White House has pushed thousands of employees out of the Social Security Administration, the agency responsible for running the program.
It's repeatedly tried to cut phone services, making it more difficult for older Americans, less facile with the internet, to deal with the agency.
Most recently, the Social Security Administration said it would back off a plan that would have made it more difficult for folks to use the phone to make minor changes to their accounts.