AARP: Strengthen Social Security, don't carve it up
George Rowan, president, AARP Michigan November 29, 2004
It's time to talk about Social Security.
Whichever presidential candidate won, looming Social Security issues were to be on the agenda. And so they are, as President Bush has said that Social Security changes will be a domestic priority in his second term.
AARP welcomes the discussion. All of us need to be engaged in the coming dialogue about what Social Security should look like as the boomer generation nears its retirement years. Few programs in the history of our nation have been as successful as Social Security in bettering the nation and society.
Social Security is the "first pillar" of retirement security. Social Security is guaranteed, backed by the full faith and credit of the United States. It's there for the recipient's lifetime. It's inflation proof. It's not subject to the vagaries of the market or volatile interest rate swings. It's a promise made, and a promise kept. It is a program of particular importance to women, African Americans, Hispanics and certain other groups, who often depend on Social Security as their primary or only source of retirement income.
Unlike Social Security, private investments are subject to the risks of the market, while pensions are increasingly unreliable, as companies look to save money by cutting benefits promised to retirees. Without Social Security, about half our senior population would tumble below the poverty line, with all the attendant bad consequences that would bring. That's not the kind of society any of us want for ourselves or our families, so whatever changes are made in the program had better be well thought out and fiscally sound.
Right now and for years to come, Social Security is sound and solvent. The Social Security Trust Funds hold over $1.5 trillion in U.S. Treasury bonds that earn interest every year. According to the Social Security trustees, with no changes, the program will pay 100 percent of benefits until 2042 and more than 70 percent of promised benefits after that. Now, while it is in good health, is precisely the time to strengthen Social Security.
Any changes in Social Security must recognize that the program is a shared obligation of all Americans. Without full participation, the program cannot continue to provide benefits. We oppose individual investment accounts that take money out of Social Security. Even the supporters of those carve-outs acknowledge that they would unquestionably inject an element of risk into the system that is not now present. While we encourage individuals to invest for retirement, we believe allowing funds that would otherwise be pooled to be taken out of Social Security would be a disaster for the program and for the nation, while incurring $1-2 trillion in transition costs that we cannot afford.
AARP suggests that simple steps can be taken to begin making a down payment on any long-term Social Security shortfall. We support:
* Investing part of the Social Security surplus so that it earns higher returns than those offered by U.S. Treasury bonds. That way, we strengthen Social Security while sharing the risks of investing. We should not be creating a system where some people win and others lose when it comes to Social Security.
* Raising the cap on the amount of wages taxed to support Social Security to cover the same share of wages as in the past. That would gradually raise today's cap of $88,000 to approximately $140,000.
* Making Social Security a truly universal system by including all newly hired state and local government workers in Social Security.
We believe these are correct steps that will strengthen Social Security. Private retirement accounts are an excellent way to save for retirement, but only if we fund them in addition to - not in place of - Social Security. Ultimately, we will have to decide whether Social Security is another way for individuals to build private ownership or is, as always intended, a social insurance program that provides seniors with a safety net against living in poverty, and income enough to live out their years with dignity.
It's time to talk about Social Security.
Whichever presidential candidate won, looming Social Security issues were to be on the agenda. And so they are, as President Bush has said that Social Security changes will be a domestic priority in his second term.
AARP welcomes the discussion. All of us need to be engaged in the coming dialogue about what Social Security should look like as the boomer generation nears its retirement years. Few programs in the history of our nation have been as successful as Social Security in bettering the nation and society.
Social Security is the "first pillar" of retirement security. Social Security is guaranteed, backed by the full faith and credit of the United States. It's there for the recipient's lifetime. It's inflation proof. It's not subject to the vagaries of the market or volatile interest rate swings. It's a promise made, and a promise kept. It is a program of particular importance to women, African Americans, Hispanics and certain other groups, who often depend on Social Security as their primary or only source of retirement income.
Unlike Social Security, private investments are subject to the risks of the market, while pensions are increasingly unreliable, as companies look to save money by cutting benefits promised to retirees. Without Social Security, about half our senior population would tumble below the poverty line, with all the attendant bad consequences that would bring. That's not the kind of society any of us want for ourselves or our families, so whatever changes are made in the program had better be well thought out and fiscally sound.
Right now and for years to come, Social Security is sound and solvent. The Social Security Trust Funds hold over $1.5 trillion in U.S. Treasury bonds that earn interest every year. According to the Social Security trustees, with no changes, the program will pay 100 percent of benefits until 2042 and more than 70 percent of promised benefits after that. Now, while it is in good health, is precisely the time to strengthen Social Security.
Any changes in Social Security must recognize that the program is a shared obligation of all Americans. Without full participation, the program cannot continue to provide benefits. We oppose individual investment accounts that take money out of Social Security. Even the supporters of those carve-outs acknowledge that they would unquestionably inject an element of risk into the system that is not now present. While we encourage individuals to invest for retirement, we believe allowing funds that would otherwise be pooled to be taken out of Social Security would be a disaster for the program and for the nation, while incurring $1-2 trillion in transition costs that we cannot afford.
AARP suggests that simple steps can be taken to begin making a down payment on any long-term Social Security shortfall. We support:
* Investing part of the Social Security surplus so that it earns higher returns than those offered by U.S. Treasury bonds. That way, we strengthen Social Security while sharing the risks of investing. We should not be creating a system where some people win and others lose when it comes to Social Security.
* Raising the cap on the amount of wages taxed to support Social Security to cover the same share of wages as in the past. That would gradually raise today's cap of $88,000 to approximately $140,000.
* Making Social Security a truly universal system by including all newly hired state and local government workers in Social Security.
We believe these are correct steps that will strengthen Social Security. Private retirement accounts are an excellent way to save for retirement, but only if we fund them in addition to - not in place of - Social Security. Ultimately, we will have to decide whether Social Security is another way for individuals to build private ownership or is, as always intended, a social insurance program that provides seniors with a safety net against living in poverty, and income enough to live out their years with dignity.
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Whichever presidential candidate won, looming Social Security issues were to be on the agenda. And so they are, as President Bush has said that Social Security changes will be a domestic priority in his second term.
AARP welcomes the discussion. All of us need to be engaged in the coming dialogue about what Social Security should look like as the boomer generation nears its retirement years. Few programs in the history of our nation have been as successful as Social Security in bettering the nation and society.
Social Security is the "first pillar" of retirement security. Social Security is guaranteed, backed by the full faith and credit of the United States. It's there for the recipient's lifetime. It's inflation proof. It's not subject to the vagaries of the market or volatile interest rate swings. It's a promise made, and a promise kept. It is a program of particular importance to women, African Americans, Hispanics and certain other groups, who often depend on Social Security as their primary or only source of retirement income.
Unlike Social Security, private investments are subject to the risks of the market, while pensions are increasingly unreliable, as companies look to save money by cutting benefits promised to retirees. Without Social Security, about half our senior population would tumble below the poverty line, with all the attendant bad consequences that would bring. That's not the kind of society any of us want for ourselves or our families, so whatever changes are made in the program had better be well thought out and fiscally sound.
Right now and for years to come, Social Security is sound and solvent. The Social Security Trust Funds hold over $1.5 trillion in U.S. Treasury bonds that earn interest every year. According to the Social Security trustees, with no changes, the program will pay 100 percent of benefits until 2042 and more than 70 percent of promised benefits after that. Now, while it is in good health, is precisely the time to strengthen Social Security.
Any changes in Social Security must recognize that the program is a shared obligation of all Americans. Without full participation, the program cannot continue to provide benefits. We oppose individual investment accounts that take money out of Social Security. Even the supporters of those carve-outs acknowledge that they would unquestionably inject an element of risk into the system that is not now present. While we encourage individuals to invest for retirement, we believe allowing funds that would otherwise be pooled to be taken out of Social Security would be a disaster for the program and for the nation, while incurring $1-2 trillion in transition costs that we cannot afford.
AARP suggests that simple steps can be taken to begin making a down payment on any long-term Social Security shortfall. We support:
* Investing part of the Social Security surplus so that it earns higher returns than those offered by U.S. Treasury bonds. That way, we strengthen Social Security while sharing the risks of investing. We should not be creating a system where some people win and others lose when it comes to Social Security.
* Raising the cap on the amount of wages taxed to support Social Security to cover the same share of wages as in the past. That would gradually raise today's cap of $88,000 to approximately $140,000.
* Making Social Security a truly universal system by including all newly hired state and local government workers in Social Security.
We believe these are correct steps that will strengthen Social Security. Private retirement accounts are an excellent way to save for retirement, but only if we fund them in addition to - not in place of - Social Security. Ultimately, we will have to decide whether Social Security is another way for individuals to build private ownership or is, as always intended, a social insurance program that provides seniors with a safety net against living in poverty, and income enough to live out their years with dignity.
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