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OPA News Release: [08/17/2005]
Contact Name: Stephanie Cathcart
Phone Number: (202) 693-4676
Release Number: 05-1566-DEN
U.S. Labor Secretary Elaine L. Chao Visits Salt Lake City
To Highlight 70th Anniversary of Social Security and Need For Reform
SALT LAKE CITY—In remarks today to workers and community
leaders in Salt Lake City, U.S. Secretary of Labor Elaine L. Chao hailed
the Social Security system's 70th anniversary and the need to strengthen
it for the future. Secretary Chao, a member of the Social Security and
Medicare Board of Trustees and Chairman of the Pension Benefit Guaranty
Corporation, outlined the President's reform plan.
“Social Security has given generations of seniors a better quality of
life and future retirees deserve no less from the system they pay into,” said
Chao. “That is why President Bush is working hard to ensure that decades
from now Americans can still celebrate Social Security for enabling seniors
to live with dignity.”
Chao noted that the current system is making promises that will be unaffordable
for taxpayers in the future to keep. In the coming decades, population
trends will undermine Social Security and by 2041, when the current system
is expected to be bankrupt, there will be only two workers supporting
each retiree through the Social Security payroll tax. In 1950, there were
16 workers paying Social Security taxes for every person receiving benefits.
In 2017, benefits paid out will begin exceeding payroll taxes coming in.
The President has outlined three goals in strengthening Social Security:
guarantee that future generations receive benefits at least equal to today's;
make Social Security better for those who need it most; and replace the
empty promises being made to younger workers with real money. He has pointed
out that most of the challenge of getting Social Security on solid financial
footing can be met by indexing benefits for wealthier recipients to the
rate of inflation, while having benefits grow faster than inflation for
lower income workers. Everyone would be assured of getting at least what
today's retirees are receiving and lower income seniors would do better
than under the current system.
The President has also proposed an innovation called “Voluntary Personal
Retirement Accounts.” These accounts would be voluntary and empower workers
by allowing them to invest a small portion of their Social Security taxes
in a conservative mix of bonds and stocks or a risk-free Treasury bond
account. Workers would own these accounts and could leave them to their
spouses and children, a tremendous improvement over the current system
which they can pay into their entire working life and get nothing in return.
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