Social Security Reform

SOCIAL SECURITY REFORM -- (Senate - March 08, 2005)

Mr. REED. Mr. President, I rise today to express my deep concern about the direction that the President is taking the country in terms of our Nation's commitment to providing retirement security to the elderly and income security to the disabled, widows, and survivors. I am speaking, of course, about the President's plan for privatizing Social Security.

President Bush writes in his recently released Economic Report of the President, ``The greatest fiscal challenges we face arise from the aging of our society.'' Yet his annual Economic Report devotes little more than a page and a half to this important subject.

As his Economic Report reveals, the President has no real plan to address the fiscal challenges arising from the retirement of the baby boom generation, let alone a plan to fix Social Security. All the President has is an unaffordable plan to create private retirement accounts, with few specifics and many unanswered questions.

That is not stopping the President from barnstorming the country telling the American people that Social Security is a sinking ship and private accounts are the lifeboats into which we should jump. But the administration is manufacturing a crisis that does not exist in order to dismantle Social Security.

Despite the administration's claims, Social Security will remain solvent for nearly 50 more years. Even after that, Social Security would still be able to pay 70 to 80 percent of benefits. Modest changes to the system would enable Social Security to pay full benefits well beyond the next 50 years.

No other retirement system or Fortune 500 company in the United States can make that same claim. In fact, the weakness of traditional pensions makes Social Security look like the most secure part of our retirement system right now.

To put the problem into perspective, making the Bush administration's four enacted tax cuts permanent would cost three to five times more than the Social Security shortfall over the next 75 years.

For over 60 years, Social Security has provided a dependable and predictable stream of income to retired or disabled workers, their dependents and their survivors. Forty-eight million men, women, and children rely on Social Security benefits each month to help them live with dignity. The benefits are protected from inflation and one cannot outlive them.

Social Security is an insurance program, not an investment plan, and private accounts would destroy much of the insurance value of the program. More than one-quarter of Social Security benefits go to survivors and disabled workers and their families, and these benefits would be at risk under the President's proposal.

We all acknowledge the long-term fiscal imbalance of the Social Security trust fund. However, it is equally critical to recognize that the President's private accounts do absolutely nothing to address this imbalance, as a senior administration official recently acknowledged. In fact, diverting payroll tax revenues exacerbates insolvency and accelerates the date of trust fund imbalance.

For obvious reasons, the President has not mentioned this or other facts that are so critical to the Social Security trust fund. His privatization scheme requires cutting benefits by more than 40 percent, even for those who choose not to invest in privatized accounts.

Those choosing a private account could be hit with an additional ``privatization tax'' of 70 percent or more of the value of their account, which would be deducted from their Social Security benefits upon retirement.

President Bush has urged Congress to fix Social Security for younger workers and not pass on the problem to future generations. However, the President's plan for private accounts would place a huge burden on our children and grandchildren by increasing Federal debt by over $750 billion in just the next 10 years. This debt would rise to nearly $5 trillion over the first 20 years that the plan is in place.

The President's private accounts would cut Social Security's funding, weaken the program, and make its financial problems worse, not better. In short, private accounts pose a serious threat to the future economic security of all Americans, particularly the most vulnerable members of our society.

This is why last week I joined 41 of my fellow Democratic senators in calling on the President to publicly and unambiguously abandon his support for private accounts funded with Social Security dollars or cuts in guaranteed benefits.

At a time when our country is saving so little and fewer employers are offering traditional pension plans, Social Security's predictable, inflation-protected benefits that can't be outlived occupy a critical role in ensuring our retirement security.

Before we can roll up our sleeves and delve into the very serious question of shoring up Social Security for all, we must set aside ideology and acknowledge the demographic and fiscal challenges facing this bedrock retirement security program.

I want to work with President Bush to promote personal wealth and saving through investment, but not at the cost of Social Security. I urge the President to take private accounts off the table so that we might achieve bipartisan agreement to strengthen Social Security for the long-term and enhance the retirement security of all Americans.

I yield the floor.

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