Homepage
-- Programs and Services -- Contact Information Privatizing Social Security hurts American workers
Social Security is the most popular government program in the history of the United States. For nearly 70 years, Social Security has provided a safety net for retirees and helped millions of Americans enjoy a secure retirement. Since its inception, Social Security has never been even a day late in providing full benefits to our nation’s most vulnerable citizens – the elderly, the disabled and survivors of deceased workers. The last thing Social Security needs is a privatization plan that weakens the program by removing trillions of dollars from the Social Security Trust Fund.
Social Security has been highly successful in keeping senior citizens out of poverty. Before Social Security, at least half of the elderly population could not afford suitable housing, proper nutrition or adequate medical care. For two-thirds of the elderly, Social Security supplies the majority of day-to-day income. For the poorest 20 percent of senior citizens, Social Security is their only source of income. According to the Social Security Administration, 8 percent of elderly beneficiaries meet the definition of poor. However, without Social Security, 48 percent would fall into poverty.
This year Congress will debate important changes to Social Security. During this debate it is important to remember the facts about Social Security’s solvency. Social Security is not threatened by bankruptcy, and does not face a crisis. In fact, if we do nothing to change the current system, the program will continue to pay full benefits until 2052. After that, Social Security will continue to pay 75 percent of guaranteed benefits. In contrast, the Bush Administration’s proposal to privatize Social Security actually shortens the life of the Social Security Trust Fund by at least 20 years.
Social Security faces challenges, but private accounts are not the answer. Private accounts will do nothing to improve the solvency of Social Security. In fact, they will make the problem worse by draining trillions of dollars from the Social Security Trust Fund and greatly increasing the federal debt. In addition, privatization would change the Social Security indexing formula in a way that would cut benefits by 50 percent, and private accounts will not be able to make up for the loss in benefits for millions of Americans. For example, a senior depending on Social Security for retirement income would receive only $516 a month under the privatization proposal, as opposed to the current average benefit of $955. This means that a retiree who lives for 20 years after his or her retirement could expect to lose $134,000 in retirement income over a lifetime.
Social Security represents a pact between generations that gives every American some financial security in their old age. The payroll taxes that are paid into the system by today’s workers go directly to today’s retirees. When today’s workers retire they will receive benefits paid by the next generation of workers. Social Security has improved the lives of millions of Americans and it will continue to do so for generations to come if we commit to reforming and not dismantling this successful retirement program.