POST-GAZETTE - Res Publica
The Problems Facing Social Security
by David Trumbull
March 11, 2005
"One of America's most important institutions - a symbol of the trust between generations - is also in need of wise and effective reform. Social Security was a great moral success of the 20th Century, and we must honor its great purposes in this new century. The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security."
President George W. Bush
A Social Security System designed for a 1935 world does not fit the needs of the 21st Century. Social Security was designed in 1935 for a world that is very different from today. In 1935, most women did not work outside the home. Today, about 60% of women work outside the home. In 1935, the average American did not live long enough to collect retirement benefits. Today, life expectancy is 77 years.
Social Security will not be changed for those 55 or older. Today, more than 45 million Americans receive Social Security benefits and millions more are nearing retirement. For these Americans, Social Security benefits are secure and will not change in any way.
Social Security is making empty promises to our children and grandchildren. For our younger workers, Social Security has serious problems that will grow worse over time. Social Security cannot afford to pay promised benefits to future generations because it was designed for a 1935 world in which benefits were much lower, life-spans were shorter, there were more workers per retiree, and fewer retirees were drawing from the system.
With each passing year, there are fewer workers paying ever-higher benefits to an ever-larger number of retirees. Social Security is a pay-as-you-go system, which means taxes on today's workers pay the benefits for today's retirees. A worker's payroll taxes are not saved in an account with his or her name on it for the worker's retirement.
Social Security is heading toward bankruptcy. According to the Social Security Trustees, thirteen years from now, in 2018, Social Security will be paying out more than it takes in. And, when today's young workers begin to retire in 2042, the system will be exhausted and bankrupt. If we do not act now to save it, the only solution will be drastically higher taxes, massive new borrowing, or sudden and severe cuts in Social Security benefits or other government programs.
As of 2004, the cost of doing nothing to fix our Social Security system had hit an estimated $10.4 trillion. The longer we wait to take action, the more difficult and expensive the changes will be. Every year we wait costs an additional $600 billion. Today's 30-year-old worker can expect a 27% benefit cut from the current system when he or she reaches normal retirement age. And, without action, these benefit cuts will only get worse.
In the State of the Union Address, President Bush called for an open, candid review of the options to strengthen Social Security permanently for our children and grandchildren.
The President believes that we must move ahead with reform, because our children's retirement security is more important than partisan politics.
[The above information was taken from the Republican National Committee website www.gop.com.]
David Trumbull is the chairman of the Boston Ward Three Republican Committee; he may be contacted at (617) 742-6881 or email@example.com. Boston's Ward Three includes the North End, West End, part of Beacon Hill, downtown, waterfront, Chinatown, and part of the South End.