The battle over the possible creation of individual Social Security accounts heated up as both sides launched new tactics that were designed to influence the outcome of legislation this year.
Labor unions sent letters of protest to investment firms that either back personal accounts or belong to organizations that do. Business groups working together to support the accounts mobilized voters to show up at meetings held by lawmakers over the long Presidents' Day weekend.
President Bush has made creation of individual accounts as part of Social Security his chief domestic priority.
The union letters expressed "concern" about the investment firms' lobbying for the accounts and asked that it stop. But the letters didn't threaten to withdraw union pension funds from the management of the firms that don't change their view.
Over the past several weeks, three union trustees of the New York City Employees' Retirement System wrote to a half-dozen investment banking companies seeking a meeting to discuss the firms' Social Security policies. According to the AFL-CIO, the companies contacted included J. P. Morgan Chase & Co., Merrill Lynch & Co., Morgan Stanley, Barclays Global Investors N.A., T. Rowe Price Group Inc, and State Street Corp.
Merrill, Barclays, T. Rowe, Morgan Stanley and State Street declined to comment. A spokeswoman for J.P. Morgan said the firm replied to the letter, but declined further comment.
Michael Musuraca of the American Federation of State, County and Municipal Employees said the firms responded to the letters by saying they don't back any specific Social Security plan. Union trustees and the companies "are talking," he said.
In the letter to J.P. Morgan Chase, which is similar to notes sent to the other firms, the labor trustees said that they "are concerned about your firm's apparent ties to efforts that are potentially injurious to the retirement security of our plans' beneficiaries." Backing the accounts either directly or indirectly, the letter added, "may be at odds with the duty to represent the best interests of our plan and its beneficiaries."
The labor trustees asked the companies to disclose and then end their ties to groups that promote personal accounts and to request that the Securities Industry Association, the industry's trade association, "publicly renounce support for Social Security privatization."
The letters are part of a nationwide campaign by organized labor designed to shame Wall Street-related companies into staying away from the lobbying campaigns for the accounts. The AFL-CIO has set up Web sites lambasting companies like Charles Schwab Corp. and Edward D. Jones & Co. for their connections to the issue. The labor federation also has staged protests in front of offices of both companies in recent weeks.
Last week, soon after two Edward Jones offices were targeted with AFL-CIO demonstrations, the St. Louis-based brokerage decided not to renew its membership in the Alliance for Worker Retirement Security, a business coalition that backs Bush's Social Security plan.
Derrick A. Max, who heads the alliance as well as a separate business coalition pressing the same goal -- the Coalition for the Modernization and Protection of America's Social Security -- said he hasn't lost any members other than Edward Jones. In fact, since Edward Jones's departure, he said that he has gained both members and contributions. He declined to say precisely how many or how much, though he said the extra donations were substantial.
Over the three-day weekend, Max said that the coalition used lists of people sympathetic to its cause to spur pro-accounts voters to attend lawmakers' meetings back home. He added that such volunteers talked up the idea of the individual accounts at lawmakers' gatherings in 16 states and 9 congressional districts.
Separately, AARP, the senior citizen lobby, bought an estimated $5 million worth of newspaper advertisements (including in The Washington Post) that criticized Bush's plan by saying, "If you have a problem with the sink you don't tear down the entire house." This was AARP's second $5 million ad buy attacking the private accounts initiative.