Saving Social Security
Since its passage in 1935, the Social Security Act has helped provide economic security to millions of Americans. Over the years, Social Security programs have been broadened to provide more assistance to a greater number of Americans. Today, more than 150 million workers and 96 percent of all employment fields in the United States are covered under Social Security.
The Social Security system is now running surpluses of income over outlays--meaning more income from taxes is being received than there are benefits being paid. But according to the Social Security Administration's board of trustees (three officers of the President's Cabinet, the Commissioner on Social Security, and two members representing the public), these surpluses will not continue unless steps are taken to ensure future solvency of the program.
It is projected that within the next few years, the number of individuals age 65 and older will rise by 76 percent, while the number of workers supporting the system will increase by only 16 percent. As this new generation of senior citizens begins to draw benefits, the number of recipients is expected to increase to 56 million by 2013. During the next 10 years, the estimated cost to ensure continued benefits at present levels is $6.3 trillion in outlays.
By 2018, outlays will be greater than the income received from the current Social Security tax rate. Furthermore, the board of trustees projects that in 2042, Social Security trust funds will be completely depleted. In this scenario, only 73 percent of Social Security benefits would be payable with incoming receipts.
Most Members of Congress agree with the board of trustees that the Social Security program must be reformed to ensure this depletion does not happen. However, we are not all united on how this monumental reform should be undertaken.
Essentially, there are three general proposals that have been drafted in the form of legislation: partial privatization of the program to allow individuals to establish mandatory savings accounts; full privatization; and keeping the situation at status quo and reducing benefits.
During the 107th Congress, bills that would have established personal accounts to supplement or replace part of the Social Security system were introduced. A bill introduced by Representative Robert Matsui (D-California) would have enacted proposals made by a commission appointed by President Bush to provide reform recommendations.
In the current Congress, Representatives Clay Shaw Jr. (R-Florida), Adam Smith (D-Washington), Jim DeMint (R-South Carolina), and Jim Kolbe (R-Arizona) have each reintroduced proposals in slightly modified forms that would privatize Social Security through voluntary or mandatory accounts.
As we consider ways to reform Social Security, it is my belief we should allow for individual choice so that the decision-making power is placed in the hands of individuals and not the federal government. I am not sure full privatization is the answer, but I do support the privatization of a portion of an individual's Social Security funds.
Giving individuals the opportunity to invest in the private sector should yield values exceeding future Social Security benefits. Personal account investments should also offset cuts in Social Security benefits and avert the need for higher taxes which would be included in other proposals to restore the system to a sound financial footing.
Seniors deserve their hard-earned Social Security benefits without the burden of an increased level of taxation. Higher tax rates only punish seniors and discourage work and saving for retirement.
I believe the Social Security system can be reformed to ensure solvency and maintain benefits for current recipients while also providing retirement security for future retirees through this century. To achieve that, however, my congressional colleagues must join in the efforts to reform Social Security now.
Rep. Joe Barton (R) is from Ennis, Texas. He can be contacted via his Web site's feedback form at http://www.joebarton.house.gov/contact.asp.