Adam On The Issues

Social Security is among the most successful government programs in United States history, and millions of Americans have relied on it for retirement. The program works because today’s workers pay taxes into the Social Security Trust Fund, which is then redistributed to current recipients. The program is an essential safety net that protects low-wage earners, dependents, the disabled, and the elderly from poverty. However, the non-partisan Congressional Budget Office predicts that in about 20 years the cost of paying benefits will exceed revenue from payroll taxes.

The Bush Administration proposes to solve this problem by overhauling Social Security and creating private investment accounts. Workers would be able to pay less of their payroll taxes into the Trust Fund, and divert those funds into a private account which would likely be invested in the stock market.

While we must act to save Social Security, private investment accounts are not the answer because they do not fix the deficit that the Trust Fund faces.  Under the Bush plan, Social Security will run a deficit much quicker than is currently expected, because the number of workers paying into the program would decline as the number of those receiving benefits remained steady. This would deepen our enormous federal deficit, because the government would continue paying benefits while worker contributions declined. This cost of this transition is estimated at between one and two trillion dollars. 

Privatization of Social Security is fiscally irresponsible, does not improve the program's solvency, and undermines the program’s purpose as a safety net. However, Social Security’s problems are a financial reality and we must address them today so that all solutions can be examined before the Trust Fund begins to run a deficit. In the meantime, Social Security will continue to pay full benefits, and we can reach a solution that will preserve the retirement and disability benefits of millions of Americans.

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