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The Social Security Scare Games Begin - Both the House and Senate are enjoying a two-week recess during which time many elected officials will be touring the districts and States to hear from YOU – their constituents. I highly recommend that you use this opportunity to let your legislator hear what is on your mind. You elect them so they should know what issues to be focus on in Washington, DC. For a list of townhall meetings near you, or for a list of CSE top issues and recommended questions during this recess period, please click here.
Social Security – As we get closer to the November elections many issues will stop being debated on their merits and instead will become merely political footballs. Social Security has the notoriety of already achieving that status, even though seven months remain until the trip to the ballot box. Lacking any major policy ideas or initiatives, the Democrats are beginning to fall back on their usual strategy of scaring the wits out of seniors to bolster their election chances. Recent statements from Gephardt and other Democrat leaders clearly state their objective to blame Republicans for hurting seniors without putting forward any alternative to the current system.
While disappointing, these attempts to politicize Social Security also create long-term negative consequences. Social Security is going broke. By the year 2017 the system will begin paying out more money annually than it takes in. By 2041 all funds in the Social Security system will be completely depleted. To ensure long-term viability, the system has to be reformed. While these calamitous scenarios may seem far off, in reality we are running out of time to reform the system. There are no ifs, and or buts about it – unless Americans are willing to raise the payroll tax by 50 percent, from 12.4% of payroll up to18%, or cut benefits by 15 percent, reform is a necessity.
Many conservatives believe reforming Social Security will require more than cosmetic changes and therefore advocate the use of personal retirement accounts for younger workers now paying into the system. These accounts would be loosely based on the 401(k) idea, allowing individuals to place a portion of their benefits into an account that can be invested in stocks, bonds or other market devices. Current and near-retirees would continue to receive every last dime that is owed to them, while allowing a more market based system to take over. A lot of people do not understand even today that Social Security is a ‘pay-as-you-go’ system. In other words, the money that you currently pay into Social Security is not put into a bank somewhere for you to be saved for later benefit allocations. Instead, the moment that your dollar goes into the Social Security Administration it comes right back out again to give someone his benefits for that month. When Social Security was first developed in the 1930’s there was a 17 to 1 worker to retiree ratio – now that ratio is down to 3 to 1 and will by 2030 reach 2 to 1. Now you know why reform is imperative.
In creating the Social Security Commission, President Bush helped to get the national debate started and developed a number of suggestions for reform. In the meantime, Democrats would rather sit on the sidelines throwing tomatoes than get engaged in the debate. Regardless of whether or not you support the use of personal retirement accounts, at least the President and Republicans in Congress are trying to find a solution instead of just letting things get worse!
The issue of your retirement security is too important to be debated without you. Get involved in the debate. Learn about the benefits of personal retirement accounts and let the Democrats know that they must get engaged in the debate and can’t just sit on the sidelines without putting forth a plan.
Call, email, meet with your federal legislators and let them know that you won’t stand for political grand-standing. Social Security is going broke and they need to do something NOW to fix it!!