Social Security
Mr. Speaker, I rise today to discuss Social Security and the current efforts to fundamentally change the nature of this important retirement security and collective insurance program. I want to focus specifically on the impact of these…
Mr. Speaker, I rise today to discuss Social Security and the current efforts to fundamentally change the nature of this important retirement security and collective insurance program. I want to focus specifically on the impact of these efforts with respect to younger workers.
For years, my generation has been told that Social Security would not be there for us when we reach retirement age. We have been told that we are fools to count on expected Social Security benefits when planning for our own retirement; and lately we have been told that if we divert a portion of our contributions into private accounts it will somehow shore up Social Security's balance sheet while improving the return on our investment.
But those claims simply are not supported by the facts.
Make no mistake, the Social Security program faces some challenges over the next 50 to 75 years. There are a number of proposals currently being developed to try to address these problems while encouraging private savings. And I am committed to working in a bipartisan manner to support smart targeted solutions that are fiscally sound; that do not require slashing of scheduled benefits; and that do not add to the Federal deficit. But I have serious concerns with any proposal, including that of the administration, to privatize or establish personal accounts within Social Security.
First, such proposals require substantial mandatory benefit cuts to retirees; and, second, they require massive amounts of borrowing to finance the transition costs, a fiscally irresponsible plan at a time of record deficits. Despite claims to the contrary, these benefit cuts will be particularly significant to younger Americans.
The Social Security System's own actuaries estimate that the average 48-year-old will see his or her benefits reduced by 10 percent if the privatization plan is implemented. The average 18-year-old can expect a 33 percent, and by some estimates a 40 percent, reduction in benefits by the time they retire in 2052 with this risky privatization plan. The average 28-year-old will see his or her benefits reduced by 26 percent.
As a member of our Nation's younger generation of workers, I know we can do better, and I know that my generation and younger generations will not be duped into believing that Social Security faces a crisis, especially as the details of privatization plans and the structuring of proposed private accounts are made clearer.
Rather than slashing the benefits of those who are at the beginning of their careers, we should empower them to take control of their retirement security in order to enhance private savings and give them the tools to manage their financial futures with confidence and certainty. Rather than add trillions to a growing national debt, a debt
increasingly owned by foreign countries, we should act in a way that is fiscally responsible. And at a time when it is harder to qualify for pension benefits, Congress should undertake meaningful pension reform rather than continuing to weaken the three-legged stool of a solid and well-rounded retirement plan.
Mr. Speaker, Congress needs to take the long-term difficulties facing Social Security seriously, but we must be fair and comprehensive about our solutions. It is irresponsible to characterize Social Security's fiscal situation as one of imminent collapse. In order to make good decisions about the future of the program, we must engage in an honest debate about the longer-term problems facing Social Security, and that includes a real and accurate accounting of the cost of privatization as we debate the budget over the upcoming months.
The data on the proposals to privatize Social Security show that private accounts do little to improve the financial health of the program. Indeed, the massive transition cost, an estimated $1.4 trillion over the first 10 years and another $3.5 trillion over the following decade, will hasten the date of Social Security's insolvency.
Importantly, even without changes, without any changes, Social Security will be able to pay full benefits for nearly 40 years, according to the more conservative estimates of Social Security's own actuaries. After that, Social Security will continue to pay 75 to 85 percent of scheduled benefits. So, clearly, younger workers and future generations are not going to be inheriting a Social Security System that is bankrupt.
I share the concern of many independent commentators that efforts to fix Social Security through privatization will ultimately do more harm than good. What we need is a broader debate about real retirement security. If we approach that debate with an open mind and the resolve to strengthen Social Security as well as enhance opportunities for private savings, we can ensure that generations of Americans can look forward to spending the best years of their lives without worrying about how to pay for their basic needs. Americans of all ages deserve nothing less.