Social Security Needs Reform
Social Security reform is the hot topic in Washington and around the country this year. There are deeply held views on the subject on both sides of the aisle. But at the end of the day, both sides are going to have to come together to deal with the looming challenges facing the Social Security system and ensure that future retirees receive the benefits they earned. Current or near retirees do not need to worry about their own benefits as this debate proceeds. Unfortunately, future generations do. The facts on this are clear.
When Social Security was established in 1935, there were 40 workers for every retiree. Today, there are only 3.3 workers for every retiree. By the time our youngest workers turn 65, there will only be 2. By 2031, there will be 71 million older Americans, almost twice as many as today. A recent report from the Social Security Administration indicated that the system will go bankrupt sooner than previously anticipated. By 2017, it is expected that revenues will fall below costs. By 2041, it is projected that the Social Security Trust Fund will be exhausted and unable to meet its obligations. This means that if we do nothing, Americans retiring in 2041 face stiff benefit cuts, and the possibility that they will not receive the money they paid into the system. The cost of doing nothing is another motivation for action. Every year we wait to act, the cost is $600 billion. If we do nothing, the ultimate debt facing future generations could be as high as $10.4 trillion.
This situation is preventable, if we act now. President Bush has boldly called on Congress to discuss potential solutions to the problem and take action. Currently, there are heated discussions occurring in and out of Congress on what to do. The establishment of voluntary personal retirement accounts is something that I believe should be a part of the overall effort to reform the Social Security system. One of the most exciting aspects of these accounts is the potential to make them inheritable, able to be passed from one generation to the next. Millions of Americans already belong to the Investor Class and are benefiting from the growth of our economy. Personal retirement accounts could make every American an investor.
What’s most important is that we do something and soon. The facts make clear that Social Security needs reforming. I welcome your views as we debate the various proposals on how to do so and keep Social Security strong for the future.
