MINNEAPOLIS—On July 6, 2000, more than 100 CSE activists attended the Social Security Reform Town Hall Meeting hosted by Citizens for a Sound Economy Foundation and featuring Sen. Rod Grams (R-MN), retirement security expert Jose PiÃ±era, and CSE Director of Tax and Budget Policy Scott Hodge. The event was also broadcast live on the KSTP Radio’s Jason Lewis Show, which reaches hundreds of thousands of people across the state of Minnesota.
As most Americans are realizing, Social Security will begin running cash deficits in just 15 years, and by 2037, the year the so-called trust fund runs out of IOUs, those deficits will top $1 trillion. The program’s long-term liabilities are a whopping $22 trillion—six times the national debt.
As bad as this may be, Social Security also is becoming a bad deal for younger workers. Most younger workers are likely to get a paltry 1 percent to 2 percent return on their FICA tax contributions. Many minority workers will actually get less back from the system than the amount of taxes they paid into it. After a lifetime of working, that is not fair.
Personal Retirement Accounts, however, reduce the system’s long-term liabilities by effectively “pre-funding” the retirement costs of tomorrow’s retirees, while providing the tool for workers to better the pitiful returns the system now provides them.
Because Bush’s endorsement of Personal Retirement Accounts has thrust the issue into the political maelstrom of the presidential race, many voters may see this issue in purely partisan terms. But there is a remarkable amount of bipartisan support for the idea of allowing workers to invest some portion of their Social Security dollars into such accounts.
This forum allowed Minnesotans to discuss taking control of their future with one of our nation’s leading policy makers, Sen.Grams, and the authoritative sources on Personal Retirement Accounts, Mr. PiÃ±era and Mr. Hodge.
PiÃ±era, internationally recognized as a leading authority on Social Security reform, was the architect of Chile’s successful national system of personal Social Security accounts. Chile’s success in averting the financial meltdown of their social insurance system, while giving workers the tools to build their own retirement nest eggs, has become the inspiration for reform plans implemented in other countries as well as the Social Security reform plan outlined by Texas Gov. George W. Bush.