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Facts and figures about Social Security Total Social Security payout this year: $492 billion. Average monthly retiree benefit: $926 Older people receiving Social Security: 90% of those 65 or older Workers in jobs covered by Social Security: 98% about one in six Americans.
Eligible retired workers and dependents: 32.8 million
Eligible disabled workers and dependents: 7.8 million. Eligible survivors: 6.8 million total 47.4 million Young people or people under 65 don’t remember the hardships that occurred before Social Security. Social Security has lifted many people out of poverty and it has relieved many working people of the burden to fully take care of their elderly parents. Social Security Privitization Social Security is funded primarily by a payroll tax and interest on the trust fund. Employees pay 6.2% of their wages into Social Security and employers match that amount per employee. Self-employed pay 12.4 % of their income. Medicare is also paid by these payroll taxes, which is an additional 1.45% per employee and 1.45% by their employer. Social Security is supposed to have a surplus of 1.3 trillion dollars, but who knows what's available or what has been eaten up with Bush's deficits. This surplus is supposed to be invested in Treasury Bonds at about 5% interest. The law says that this is the only way the Social Security surplus can be invested. The payroll taxes are paid into the general tax fund and benefits are distributed when payment is due. Social Security has been spectacularly successful in reducing poverty among the elderly and disabled, and ensuring that people who have worked hard all their lives have a decent standard of living in retirement. Social Security is an insurance program--not an investment program--and offers benefits and protections that no investment program can provide. Unlike investment accounts, Social Security pays a progressive monthly benefit that lasts a lifetime and is guaranteed to increase every year at a rate that is protected against inflation--all with no risk of investment loss. Social Security also provides income security to disabled workers, survivors and their families that is simply unavailable in the private market. These features of Social Security mean that workers and their families have the freedom to build the bulk of their retirement savings through their own accounts that entail financial risk. President Bush's proposals to privatize Social Security is very disconcerting. His proposals would worsen the solvency of Social Security. Social Security is the country's most important and successful social program. It provides a large measure of economic security to the whole country, uniting the interests of the poor and the middle class. The program not only keeps tens of millions of retirees out of poverty, it also provides disability and survivors insurance to almost the entire working population. More children receive benefits from Social Security than from the Temporary Assistance to Needy Families Program (the revamped welfare program). Social Security is also extremely efficient and has a minimal amount of fraud and abuse. Social Security offers support to Americans when the unexpected happens. It replaces lost income for workers and their spouses and children when a worker becomes disabled or dies prematurely. For a young family, Social Security provides the equivalent of a life insurance policy worth over $400,000 and a disability insurance policy worth over $350,000, according to the Social Security actuaries. Because they have higher rates of premature disability and death, these insurance benefits are especially important to African American and Latino women and their families. President Bush will soon unveil a plan allowing younger workers to divert some portion of their Social Security payroll taxes into personalized retirement accounts. The question is how will we finance the transition costs? President Bush says, "We will not raise payroll taxes to solve this problem." The White House also opposes benefit cuts for retirees and those nearing retirement. So how do we offset these losses? There are only three options:
Molly Ivins says "I personally think the Bush proposal for privatizing Social Security is loony, radical and unnecessary." We should be looking for maximum skepticism in our sources on this subject and anybody who starts with dismissive, condescending and absolutist views isn't worth reading or listening to on this subject. Be aware of hidden assumptions that "Everybody knows" Social Security is:
"This debate is landmined with Phony Fun Facts. One notorious scare tactic is to note that when Social Security began, there were 42 workers for each retiree. Now, there are three workers per retiree. And in 25 years, there will be only two. Ergo, we're doomed. Actually, at the "frightening" current rate of three workers per retiree, the system is producing a surplus and being skimmed to finance the rest of the federal budget." According to the Congressional Budget Office, using a more realistic model, the trust fund will run out of surplus in 2052, and even then it will cover 81 percent of the promised benefits. To fully fund this shortfall would require additional revenue of 0.54 percent of GDP, less than we are currently spending in Iraq. Or, as Paul Krugman noted in the New York Times, about one quarter of the revenue lost each year by President Bush's tax cuts, "roughly equal to the fraction of those cuts that goes to people with incomes of $500,000 a year. "If there is trouble with Social Security, the obvious solution would be to raise taxes, cut benefits or some combination of both. Of course, I'm in favor of cutting benefits to the wealthy." “The Bush White house is gearing up to
launch a giant public-relations campaign, just as it did with the
campaign to sell us on the Iraq war, with a lot of phony information to
convince us all this lunacy is good for us. Social Security is of particular concern to women, since we live longer and have fewer earnings to rely on in retirement. It’s kind of hard not to be stunned by the irresponsibility of this scheme. To just blithely borrow the money to destroy a successful social program is, well, loony, bizarre and irresponsible.” Privatizing Social Security Will Hurt Women This administration has an opportunity to turn over not billions but trillions of dollars of our money to Wall Street. George Bush is in trouble. He’s
got a big debt to pay to his friends on Wall Street, and he wants to do
it fast so that the next group can belly up to the taxpayer trough. The
transition costs of his privatizing Social Security is estimated to
cost $2 trillion - enough to make Halliburton want to expand into
yet another area of government “service.” Some have
called this the “biggest bonanza in mutual fund history,” and the
financial industry stands to gain as much as $75 billion a year. Where does the money come from? The Answer Is—You. They’re even
talking about some creative accounting to keep that $2 trillion
giveaway off of the budget books—hide it and hope no one notices. Have they hired the Enron accountants to advise the Social Security Administration? Why is this a women’s issue? : Women
are far less likely than men to have a pension from their jobs, so
Social Security is likely to be their primary retirement income. Even
if women have supplemental savings, women live longer on average than
men, so their savings run out sooner—and the majority of the very
elderly are women whose only source of support is Social Security. Most
women earn less than $25,000 per year—so the administrative costs of
such a small private account would eat up most, if not all. Of the
earnings each year. In The Bush Plan to privatize Social Security would require a large reduction in the benefits provided by the existing system. A worker who is 20 today would see a cut of approximately one-third in his or her retirement benefit, although workers would theoretically recoup this loss by investing a portion of their Social Security taxes in a private account. But why risk it and why go in debt for 2 trillion dollars for the transition in which young and old alike will have to sacrifice to pay it back? Especially when Social Security is an insurance program and not an investment program, and it is not urgent to reform the system. In reality the program can pay all scheduled benefits long past the boomer’s retirement. No need to panic. The need to panic will be, if President Bush is successful in Privatizing Social Security. Privatizing Social Security is not the answer to saving Social Security. That’s what President Bush and Wall Street wants you to believe. But
the truth is that diverting money into private accounts will bleed the
Social Security system to death, drive up already record-high deficits
and leave our grandchildren with nothing but a legacy of debt.” Money that will be invested in the stock market is not money that will go to pay benefits. Please be conscious of the language; someone
may ask you, do you want to invest part of your Social Security
withholding money in private accounts? And leave out the rest of the question, “with big cuts in Social Security benefits.” And don’t fall for this one either “President’s Commission to Strengthen Social Security”. Look-out for the same tactics that were used to sell the excuse to invade Social Security trustee’s project that corporation’s profits will grow at about half the rate they did in the past. Millions of men and women now in their fifties stand to lose a substantial portion of the benefits promised them if Congress votes to allow payroll taxes to be invested in private accounts. For younger workers, the situation would be even worse. The non-partisan Congressional Budget Office estimates that privatization would mean a benefit cut of 23 percent for today’s 34-year old worker when he or she retires. People unaccustomed to handling their own money risk losing much of their savings if they make bad investment of if the market goes down as it did in 2001. What happens to the spouses, survivors and other dependents if a worker decides to stop sharing with them? When the administrative costs are combined with real numbers on stock returns, the individual accounts will provide no better returns on average than the government bonds currently held by the Social Security Trust Fund. The accounts just add risk—individuals may invest poorly or retire during a market downturn, leaving them with much less money than they’d have under the current system. Privatization of Social Security is not the way to secure money for retirement. Social Security Privatization—President Bush Admits He’ll have to Borrow: On Monday December 5th
the White House admits that the plan of privatization of Social
Security will be financed in part by new government borrowing that
could top $1 Trillion. That money will make it difficult for President Bush to honor his campaign pledge to cut the deficit in half. The Why are Activist Groups not invited, because
the present administration is using its prior tactics to fool the
public again? The real reason is of course, to open Social Security
contributions to Wall Street, and not to fix the system. “There are people in this administration who have an agenda that is not friendly to Social Security.” This
is a partisan issue (mainly because Republicans will just
“fall-in-line”) and Democrats should not be in support of privatization
of Social Security. The bi-partisan issue is that Democrats and Republicans should be working together to defeat Bush’s plan. The question is, are there any Republicans with enough courage. Better yet are there enough Democrats with enough courage. There is already some talk of compromise within the Democratic Party. Democrats and Republicans have no excuse to support privatizing Social Security. And Democrats have no need to come-up with there own plan. Just defeat it and get busy on health care reform. Social Security can be fixed in the future with modest payroll increases and similar cuts in Social Security. What will help Social Security and the economy best will be to lower the deficit and reform “Americans cannot afford to see their futures raffled off in a risky stock market gamble” One last comment: Don’t let Wall Street get their hands on your retirement account !!! If it is true that the
Bush administration wants to help workers, make business more
competitive, and ensure a nice comfortable retirement then why are we
debating a crisis in Social Security that doesn’t exist instead of a
crisis that clearly exists: the scandalous nature of our health care
system? We can do more for business, workers and retirees by enacting a national health plan. This country now spends $1.8 trillion, and by 2010 it is estimated we will spend $2.75 trillion. According to Physicians for National Health Plan (PNHP), a single-payer system could be financed by a 7 percent payroll tax and a 2% progressive income tax. With
one bold stroke, a single-payer system would do more to help the bottom
line of companies than any tax break or so-called “free trade”
agreement. And how about reducing the deficit by 300 or 400 billion dollars? Think about it; General Motors spends 15 percent of its revenue on health care costs. They spent $4.8 billion in 2003 and $5.1 billion in 2004. A GM car costs $1,400 more just because of its health care costs. Under a single-payer system GM would cut its health care costs in half. Take that price off the cost of a car or better yet make a better car, how much more could they compete on the global market. Small business would benefit even more. Small
business pays 20 to 25 percent of revenues to pay for health care
plans—and then, are often forced to drop the coverage because they
claim it’s too expensive. How about single-payer being an instant effective pay raise for millions of Americans? Unions
could win well-deserved pay hikes for workers whose wages have been
falling behind inflation; right now, every union’s main battle is
fighting just to keep health care coverage in place. Individuals who are
not lucky enough to have employer-based health care and who have been
shelling out thousands of dollars in premiums for a bare-bones health plan would pocket a sizable chunk of change with a single-payer plan. Finally,
by saving money for them on prescription drugs, among other benefits,
single-payer would also be a guaranteed help to retirees—not the
riverboat gamble a privatized Social Security system would be. Now, it’s pretty obvious why the administration is making certain choices. The pharmaceutical industry has been the single most profitable industry in the past decade. And
the financial services industry can barely restrain its orgasmic
delight at the thought of the hundreds of billions of dollars that will
wash into the market if Social Security is turned over to the Street. Both
industries, along with the health care companies, have showered tens of
millions of dollars in political campaign contributions on the
Republicans (and, to be fair, have written quite a few checks to
Democrats, too). This is a ripe area for a new, concerted effort at shareholder activism. The
argument is simple: companies who don’t advocate for a single-payer
system are endangering share-holder value, throwing money into a system
that is dragging down profits and competitiveness. And
in particular, it’s the huge public employee pension funds,
representing hundreds of thousands of current and retired workers, who
have a significant financial interest in seeing the health care system
changed. Don’t let the Republicans and some Democrats frame the debate, its health care that is in crisis not Social Security. A change to a Single-payer health care system will automatically ensure Social Security.
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