The Social Security risk<br>
“Today, more than 45 million Americans receive Social Security benefits, and millions more are nearing retirement — and for them the system is sound and fiscally strong. I have a message for every American who is 55 or older: Do not let anyone mislead you; for you, the Social Security system will not change in any way.”
-President Bush, State of the Union Address, February 2, 2005
It’s hard to think how the President could have make it any more crystal clear that the crisis facing the Social Security system is not a threat to current and near-retirees, but rather to their children and grandchildren.
Lamentably, however, some of his political opponents in Congress and special interest groups continue to use the issue to frighten senior citizens into believing that their retirement security is at risk. Because such scare tactics have been effective in the past, I suppose it’s not surprising they would be resurrected. But they’re still wrong. Opinion polls show most Americans seem wise to the tactic.
A Harris poll conducted in mid-February asked the open-ended question: What is the most important issue for government to address? Social Security was the top answer, ahead of the war in Iraq, health care, and a host of other important issues. More tellingly, a Gallup poll in the same timeframe found that nearly two-thirds of respondents believed President Bush’s proposal to allow individuals the option of investing part of their FICA taxes in regulated personal accounts was a “good idea,” even if it meant that Social Security’s guaranteed benefits would be reduced.
As complex as the issue is, voters increasingly grasp that it boils down to some basic facts. When Social Security was founded in the 1930s, average life expectancy was 63. Since benefits didn’t start until age 65, the system was obviously sound financially.
Moreover, there were about 42 workers paying taxes into the system for every one retiree drawing benefits. With life expectancy increasing and fewer babies being born, that ratio has gradually dropped to about 3-to-1 today. Within a decade each retiree will be supported by only two workers, putting even more strain on the system.
In just 13 years there will be less revenue coming into Social Security than payments going out to beneficiaries, and under current law, benefits must be reduced to match revenue in 2042.
As President Bush pointed out, “2018 and 2042 may seem a long way off. But those dates are not so distant, as any parent will tell you. If you have a five-year-old, you’re already concerned about how you’ll pay for college tuition 13 years down the road. If you’ve got children in their 20s, as some of us do, the idea of Social Security collapsing before they retire does not seem like a small matter.”
Over the next year, the American people will have an opportunity to debate a number of different approaches to grapple with these realities. We will need to follow the same fundamental principles that guided the original creation of Social Security: providing all Americans with a supplement to their income to guarantee security and peace of mind in retirement. For today’s seniors there is no problem, but for young Americans, the current system cannot meet this goal.
To foster a bipartisan discussion, President Bush has made clear that all options are open and reformers will listen to “anyone who has a good idea.” No lasting solution will be easy. But we must move ahead with an open and honest discussion, free of demagoguery and scare tactics, or we will fail to meet a most basic responsibility we have to future generations.
Note: Senate Democratic Leader Harry Reid (D-NV) and others have announced plans to visit Arizona on March 5 to counter Sen. Kyl on his opinion of Social Security reform.