Keeping Social Security's Promise
When you get to a certain age, you realize that one of the great lessons of life is the importance of keeping your word. That’s not something that happens enough in Washington these days, but there are certain issues so important that we simply cannot do anything less.
Social Security is just such an issue. When Congress enacted the program in 1935, it promised American workers that Social Security would provide benefits to them when they retired. Many of my friends in Arizona today depend on Social Security for a major portion of their income. So when politicians start talking about “reforms” to Social Security I don’t blame seniors for being a little nervous.
Changes are needed to keep Social Security sound, but they cannot come at the expense of senior citizens or near-retirees. They depend on Social Security’s promise to help provide for them in their retirement – and that is one promise I will make sure Washington keeps.
Like President Clinton before him, President Bush often has spoken on the need to reform and strengthen Social Security for future generations. Both Presidents have acknowledged that Social Security faces a funding crisis as people live longer and a greater number of workers retire. Simply put, the number of current workers contributing to Social Security has dropped significantly in proportion to the number of retirees. In 1945, for example, there were 20 workers supporting every one retiree; that ratio is now quickly dropping to just two to one.
Earlier this year, President Bush appointed a bipartisan commission to examine Social Security and make recommendations to protect it over the long term. The President asked former Senator Daniel Patrick Moynihan, a Democrat, to chair the commission. Senator Moynihan is fondly regarded as the “savior of Social Security” due to his past efforts to protect and strengthen the system. In fact, the Democratic Leader of the Senate, Tom Daschle, one stated that Moynihan “knows more about Social Security than most people will ever learn.”
Recently, the bipartisan commission issued a report stating that Social Security’s costs will exceed money coming in by 2016. Eventually, the government will face several difficult choices to keep the system afloat – raising taxes, cutting benefits or borrowing more money.
While there is now a Social Security surplus (more payroll taxes collected than paid out), the rate of return from the existing program has fallen to barely two percent, and will likely be lower for future retirees. Meanwhile, stock-market investments have returned more than 10 percent over a typical 20-year period. A well-designed system that allows individuals to control their own personal Social Security account could generate more than enough to ensure payment of all promised benefits without new taxes or reductions in benefits.
I believe that Congress and the President must act soon to guarantee that Social Security will be there for future generations without having to raise taxes or cut benefits. A consensus seems to be developing around a strategy of allowing workers to invest a percentage of Social Security funds to generate the income that will be necessary to meet the new demands.
Unless we can find a way to encourage growth in the Social Security fund, the system’s financial crises will continually put at risk American’s retirement security. This isn’t fair to senior citizens who depend on the program, nor to current workers who will continue to face uncertainty over whether Social Security will be there for them when they retire (and who will have to pay the increased taxes).
Given these facts, I am very concerned that some in Washington appear more interested in scaring retirees for political gain than in seeking responsible solutions. As the Commission’s work proceeds, I will be pressing for all parties to work together in service to finding real solutions and a secure retirement for Americans now and in the future.