News Release

McCrery's Judgement Challenged On Social Security

WASHINGTON, D.C. – Campaign for America’s Future Deputy Director Ellen Miller today  outlined how Rep. Jim McCrery, R-La., is as an emblem of the increased corruption in Congress on a conference call with reporters. Rep. McCrery’s profile has risen to national prominence recently with his new position as chairman of the House subcommittee on Social Security.

Citing his ties to securities and commercial banking industries, Miller questioned who stands to benefit most from the decisions Rep. McCrery will make as chair of the Social Security Subcommittee. The Campaign for America’s Future released an analysis of Rep. McCrery’s record on today's call and kicked off an ad campaign in his backyard. The group will run its first ads tomorrow and Sunday in the Shreveport Times and Shreveport Sun and is raising money for broadcast ads.

“Rep. McCrery is compromised as chairman of the Social Security Subcommittee because he’s accepted hundreds of thousands of dollars in campaign cash from the very interests who will benefit the most if the president’s plan to privatize Social Security is passed,” said Miller. “McCrery presents a perfect example of the corruption rampant in today’s Congress.”

Former Shreveport City Councilor Larry Ferdinand weighed in later with a statement that echoed Miller's concerns. “The people of Shreveport need Rep. McCrery to represent the folks on Main Street here,” said City Councilor Ferdinand. “McCrery is a Washington Republican representing Wall Street firms based in New York City. He’s not giving Shreveport voters a chance.” As the newly appointed chairman of the House Social Security Subcommittee, Rep. McCrery has accepted more than $200,000 in the last four years from the banking and securities companies that stand to benefit from the president’s Social Security privatization plan.

University of Chicago economist Austan Goolsbee said the president’s privatization plan amounts to the largest windfall gain in American financial history. Goolsbee found that big banks stand to gain nearly $1 trillion from the president’s private Social Security accounts.

In the last election cycle alone, Rep. McCrery’s contributions from the securities and commercial banking interests increased by 42 percent. Among the entities contributing during that time were the American Bankers Association; Bank of America; and Wachovia.

Rep. McCrery supported the President’s Social Security Commission report, which advocated the use of private accounts in 2001. One year later, Rep. McCrery voted for a Republican budget in Washington that committed using $224.3 billion in surplus Social Security revenue.

Rep. McCrery was first elected in 1988 and has been comfortably re-elected since then. He has worked with prominent Washington Republicans for years, drafting their most controversial policies.

In every election cycle, Rep. McCrery has quietly amassed a war chest furnished by top lobbying interests in Washington, from big pharmaceutical companies to insurance interests to oil and gas conglomerates. Rep. McCrery also has strong connections to lobbyists who represent the financial services industry. Many of his former staff members now work for the Securities Industry Association, one of the leading groups pushing for the president’s plan to privatize Social Security and to cut its guaranteed benefits.

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***NOTE: A copy of the first set of ads is available at http://www.ourfuture.org/docUploads/mccrery_ad.pdf and the Campaign for America’s Future report on Rep. James McCrery, R-La. is available at http://www.ourfuture.org/docUploads/mccrery_report.pdf **

 McCRERY SIDES WITH WALL STREET, NOT MAIN STREET

BACKGROUND

McCrery flip-flopped on his support for privatization. Rep. McCrery made statements backing away from the president’s plan to carve out a portion of the payroll tax to fund private Social Security accounts. McCrery told the press that like the president, he too would like to create private accounts. McCrery said he favors paying for them from the general revenue. (Associated Press, 2/3/05) McCrery then flip-flopped on the issue endorsing the president’s privatization plan. “I’m convinced the president’s approach is worth pursuing in the legislative process.” (Tallahassee Democrat, 2/15/05)

McCrery’s corporate contributions and related voting record show who he works for. With contributions from Wall Street flowing in and his support behind the president’s privatization plan, Rep. McCrery could place the livelihoods of about 110,000 Social Security beneficiaries in his district at risk. According to the Social Security Administration, the average monthly benefit for retirees in Rep. McCrery’s district is only $829 per month. (Social Security Administration: Congressional Statistics) Similarly, with his support of the GOP Medicare prescription drug bill, Rep. McCrery placed Louisiana’s 620,000 Medicare beneficiaries at the mercy of another major campaign contributor: insurance companies. (Kaiser Family Foundation)

McCrery’s ties to the securities and commercial banking interests are enough to call his impartiality on the issue into question. Between the 2000 and 2004 election cycles, McCrery has received nearly $200,000 in campaign contributions from individuals and PAC’s in those industries. Between 2002 and 2004 alone, contributions increased by 42 percent, going from $61,650 to $87,500. Among the entities contributing during that time are the American Bankers Association with $14,500; Bank of America with $12,500; and Wachovia with $8,000. (Center for Responsive Politics) In 2001, Rep. McCrery supported the president’s Social Security Commission report, which advocated the use of private accounts. (HR 2590, House Vote 273, 7/25/01) One year later, Rep. McCrery voted for a GOP budget that committed using $224.3 billion in surplus Social Security revenue. (H Con Res 353, House Vote 79, 3/20/02; CQ Bill Analysis) Because he has supported most of the industry’s lobbies for issues, Rep. McCrery’s securities industry contributions are only expected to rise as the debate over private accounts continues.

McCrery publicly stated he regularly visits Kenneth Kies, the leading GOP tax lobbyist. In 1998 Kies left his job as chief of staff at the Joint Committee on Taxation to pursue a career in lobbying. Since then, he and McCrery have crossed paths on numerous occasions. In 1998, Kies held a workshop at the White House Conference on Social Security entitled “Social Security and Private Market Investments.” McCrery was a participant. (Federal Document Clearing House, 12/9/98) In 2001, McCrery sponsored a measure that would have permanently extended the subpart F exemption to the internal revenue code. McCrery’s sponsorship would have allowed securities firms to defer taxation on earnings from foreign operations at a cost to the treasury estimated to be $21.2 billion over a 10-year period. (HR 1357, 4/3/01; CQ Weekly, 2/2/02) Kies was named a “major player” on the issue, working for the securities industry. (American Lawyer Media, 12/17/01) In 2003, McCrery told the press that Kies visits him every few weeks. (The Hill, 10/14/03) According to Political Money Line, Kies’ current list includes Bank of America and Goldman Sachs. Bank of America has contributed thousands to McCrery and both entities could potentially profit from the president’s privatization plan.

McCrery’s former aides are now lobbyists for an organization that is pushing for private accounts. McCrery’s former legislative director, Jonathan Traub, joined the Securities Industry Association as vice president for federal tax legislation and as one of their registered lobbyists. (The Frontrunner, 4/1/04; Political Money Line) Traub joined Richard Hunt, another McCrery aide who had already joined the SIA. (Roll Call, 4/5/04) McCrery has voted for measures pushed by corporate contributors in the past. McCrery also sits on the Ways and Means Committee’s health subcommittee,  and he received enormous sums from the health care and insurance industry. In 2000, the health care industry contributed $66,209 to McCrery’s committee. In 2004, that figure rose by 64 percent to $108,368. Similarly, insurance industry contributions rose by 101 percent from $41,900 in 2000 to $84,383 in 2004. (Center for Responsive Politics; Political Money Line) Not surprisingly, McCrery supported the GOP Medicare prescription drug bill, which gave an enormous windfall to the insurance and pharmaceutical industries in 2003. (HR 1, House Vote 669, 11/22/03; Center for Responsive Politics) McCrery also supported GOP efforts to cap medical malpractice damages awards with two votes in the 108th Congress. Both bills served the insurance and pharmaceutical industry as they exempted pharmaceutical manufacturers from liability. (HR 5, House Vote 64, 3/13/03; HR 4280, House Vote 166, 5/12/04)

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 The Campaign for America's Future (CAF) is a center of progressive strategy, organizing and issue campaigns. CAF anchors a progressive leadership network, enlisting leaders at the national, state and local levels to build a more just and democratic society. The Campaign is leading the fight about America's priorities – against privatization of Social Security, for investment in energy independence, good jobs and a sustainable economy, for affordable health care and more.