Bill Bennett,
Fox, Glenn Reynolds ("
Instapundit") and others are all suggesting that FDR supported the idea of social security money being diverted to the private sector. As ostensible proof, they cite FDR's proposal regarding "voluntary contributory annuities."
However, FDR was clearly not talking about investment in the private sector, as the Bush plan encourages, and as implied by the Fox phrase "private investment accounts." FDR's proposal of "voluntary contributory annuities" was for insurance-type annuities, to be issued and guaranteed by the government. Income from this program "would go into the trust fund along with the payroll taxes collected under the mandatory program." This is clearly explained
here.
The phrase "private investment accounts" implies money is put in the hands of Wall St. Indeed, that's what the Bush plan encourages. FDR's phrase "voluntary contributory annuities" was referring to money that would be placed in the hands of the government. Fox is pretending this distinction is meaningless.
FDR was talking about allowing workers to voluntarily send extra money to the government, to add to the mandatory retirement fund, and to support a guaranteed benefit. Bush is talking about taking money that currently goes to the government and sending it to Wall Street instead. To treat these two proposals as equivalent is a fraud.
Media Matters has a good article on this subject, pointing out various other aspects of how FDR is being misinterpreted. But I think MM unfortunately misses the most simple and fundamental distortion, which I've described here.
Worse, I think the MM article confuses the issue by referring to "Roosevelt's idea of government-sponsored private investment accounts," as if FDR was talking about funds that would be held by Wall Street. He wasn't.