Social Security

Social Security has been an important, successful program for over sixty-five years, providing benefits to millions of senior citizens and the disabled. However, I also recognize that Social Security must remain a system on which our children and grandchildren can depend.

In recent years, there has been widespread acknowledgement that the long-term health of the Social Security system must be addressed. Accordingly, a national discussion has evolved as to the future of Social Security. Our first and foremost concern in this effort is to maintain the promises we have made to protect current recipients, while strengthening the system in order to guarantee benefits for future retirees.

The seeds for the current debate date back to the mid-1970s when it became apparent that changing economic and demographic circumstances would strain the financial condition of the existing system. In 1950, sixteen workers paid into the system for every one individual receiving benefits. Today, that ratio has shrunk to just three to one. When our children retire, the ratio will fall to just two workers per beneficiary. In addition, life expectancy has increased. When Social Security was created, benefits were paid at age sixty-five. However, average life expectancy was only sixty years. Today, we are living longer, healthier lives. While this is undoubtedly good news, the combination of falling birthrates, increasing life expectancies and the retirement of the Baby Boomers is creating tremendous pressure on the Social Security system.

While current Social Security retirement benefits are secure, in a little over a decade the source of these benefits will begin to show deficits. By 2010, federal health care and education programs will come under intense financial pressure as current Social Security surplus monies will no longer be made available for government spending. By 2018, Social Security will be paying out more than it is taking in. Substantial deficits in the Social Security program will continue, and by 2042, the system will approach bankruptcy. If we wait to address the problem at that point, the only solutions will be substantial tax increases, massive new borrowing or large cuts in Social Security benefits or other government programs. It would be easy to turn away and leave the tough decisions to others, but we owe it to current and future workers to address the problem now. In fact, according to the Social Security Administration, each year of inaction increases the bill to the next generation by $600 billion. I wholeheartedly agree that this Congress must take up the responsibility to secure Social Security for our children and grandchildren.

Various proposals are currently being considered in Congress to strengthen the system with innovative reforms. One proposed method of addressing the Social Security system's problems is to allow workers the choice to place a percentage of the money taken out of their checks in payroll taxes into personal retirement accounts of their choosing. Personal investment accounts would provide options that would allow younger workers the flexibility to plan for their retirement. Those who choose to participate in the program will have the opportunity to earn higher benefits through low-risk investments and economic growth. The account would be owned entirely by the worker, not the government. Under current law, Congress has the right to alter, amend or repeal any provision of Social Security. Personal accounts would allow the worker the choice to control his or her hard-earned money, and would be an asset that could be passed on to future generations. Americans should have the right to control their retirement security. Replacing a portion of the government-run system with voluntary personal retirement accounts managed by individuals certainly has merits and needs to be considered, along with many other proposals, as a viable option.

I appreciate the effort by Idahoans to make their views known regarding Social Security. The Senate Finance Committee, of which I am a member, continues to hold hearings on the state of the Social Security system and the ways it can be improved to ensure a safe, secure retirement for current and future retirees. I look forward to an open, honest exchange of ideas and views from all sides of the issue.

Useful Links

http://www.ssa.gov - The official website of the Social Security Administration.

http://www.finance.senate.gov - The Senate Finance Committee's website. This is the committee that will be addressing the challenge of strengthening Social Security.

Recent Events

May 2005
5-25-05 Social Security: Achieving Sustainable Solvency

April 2005
4-28-05 Building Assets for Low-Income Families
4-26-05 Proposals To Achieve Sustainable Solvency, With and Without Personal Accounts

February 2005
2-2-05 Long Term Outlook for Social Security