After much research and discussion, we found this statement to be Half True. This was a challenging quotation to fact-check, as it's about a hot-button issue surrounded by emotional rhetoric from all sides of the U.S. political spectrum.
Some reliable links described the negative consequences of privatizing social security. (Apparently, many Republicans do not agree that it should be privatized, even though President Bush originally proposed doing so during his second term.) An extensive report from the Century Foundation, a nonpartisan think-tank, provides twelve compelling, well-sourced reasons which seem to support President Obama's claim that privatizing social security is "ill-conceived." Since the phrase "ill-conceived idea" is an opinion, not a statement of fact, we did not include this in determining the verdict, even though much factual evidence we found suggests this is likely to be true.
While the President's weekly address and an official White House press release made this claim on August 14, 2010, they included few facts to support it. But we found a number of sources that supported the part of the quote which states that privitizing Social Security "would add trillions of dollars to our budget deficit" -- such as this analysis from the Center on Budget and Policy Priorities, which clearly explains "that borrowing $2 trillion to fund individual account does nothing to reduce Social Security's long-term deficit." An About.com post on Bush efforts to privatize social security mentions that "the government would have to borrow up to $2 trillion" and an article in Slate describes these "trillions" as a "transaction cost...money that would have to be borrowed in the market to cover the lost cash flow into the Social Security system," yet both writers don't source their statistic. It's an interesting example of how in online news, statistics can be oft cited but easily get disconnected from their point of origin.
The part of the quotation we rated as false centered around "tying your benefits to the whims of Wall Street traders." A thorough analysis by FactCheck.org found that "Obama's remark ... is an exaggeration, to say the least," basing their conclusion on details in Bush's February 2005 plan. In addition, a couple of sources (NewsBusters and National Review Online) reason that social security is currently a bigger risk than the stock market because it is already trillions in debt and could run out soon, leaving future generations without this safety net.
Other sources (including the Christian Science Monitor and U.S. News and World Report) took more objective stances in reporting on President Obama's weekly address. Social Security celebrated its 75th birthday on August 14th, and mid-term elections are just around the corner. Democrats want to be viewed as social security's protectors, and Republicans want everyone to forget that former President Bush proposed this risky plan. This is a political issue in an election year, with the control of Congress possibly at stake. Both parties seem to be using fear to sway voters around this polarizing issue.
-- By Kristin Gorski, on behalf of NewsTrust Editors