Columns

Friday, March 4, 2005

let’s keep social security strong

By Senator Tom Harkin

Since more than half a million Iowans receive Social Security benefits, my office is being flooded by letters, e-mails, and phone calls from Iowans with concerns about President Bush’s privatization proposal. I want to work with the president to strengthen Social Security, but I want to do it right. With the looming retirement of baby boomers, Social Security will face challenges. But these challenges are manageable and there is no excuse to rush into a plan that will drive up the debt and cut benefits for America’s seniors.

President Bush has proposed creating private Social Security accounts that would cut benefits by one-third or more, even for those who choose not to invest in privatized accounts. Workers could invest two-thirds of their Social Security contribution in stocks and bonds, but those returns could not make up for the deep benefit cuts and would be subject to the whims of Wall Street. Even those who invest as wisely as Warren Buffet would see returns far lower than the current guaranteed Social Security benefit.

Even many supporters of the president’s plan acknowledge that private accounts have nothing to do with ensuring the long-term financial health of Social Security. In fact, to fund the private accounts, the government would have to borrow more than $4 trillion dollars over the first 20 years – making Social Security’s financial problems much worse and even further from being solved.

We need to find new ways and new incentives to encourage people to save and invest for their retirement, but this should be in addition to Social Security, not instead of Social Security. Social Security is an insurance program, not a savings account. It is there to provide a guaranteed, risk-free benefit in time of retirement, death, or disability. It is one leg of the three-legged stool that will allow us a secure and dignified retirement. The other two legs of the stool – personal investments and employer-provided pensions – are subject to the ups and downs of the stock market and the economy. It is important to keep the third leg, Social Security, rock-solid, risk-free, and guaranteed in case those other two legs come up short.

Most people are also not aware that a major function of Social Security is to provide disability insurance to workers. Currently, more than six million Americans rely on Social Security disability benefits. For many, that disability check is 100 percent of their income. The budget calculations in the president’s own privatization commission assumed that disability benefits would be cut by the same 30 percent-plus as retirement benefits. Private accounts cannot make up the difference for a worker who becomes disabled at an early age. This is completely unacceptable. Unfortunately, the fate of the six million people who rely on disability benefits has been almost completely ignored in the president’s discussions on Social Security.

We must be responsible and take reasonable, moderate steps to strengthen Social Security for future generations. Millions of Iowa seniors, Americans with disabilities and others who rely on Social Security are depending on Congress and the president to protect this program. I hope the president will work with Congress to do just that.

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