3-16-05, 9:01 am

From UAW

Skeptical about the changes in Social Security President Bush is proposing? You should be.

Social Security is an insurance policy that workers pay into during their working years so they will be guaranteed a dignified retirement when their working days are done. The system also supports disabled workers, widows and the children of workers who die young. It’s a pact the American community has made. It reflects humanity, dignity and the right values.

It’s not about taking risks. It’s a promise that has been kept between generations since Social Security was instituted in 1935.

But President Bush and his extremist friends want to change that because the system faces some future challenges, though not an immediate crisis. Somewhere around 2018 Social Security will start to pay out more than it takes in. At that point the Social Security Trust Fund will kick in and make up the difference until about 2052, according to the nonpartisan Congressional Budget Office.

If the American economy is weak, it will be able to pay out about 75 percent of what has been promised. Then, if the American economy grows at the same rate it has the past 75 years, there will be no problem.

So why introduce risk into the system?

Without the guaranteed benefits, more than 50 percent of our seniors would live in poverty.

As Solidarity went to press, the president had not put forth a definite plan. But based on his State of the Union address, the recommendations of his 2001 Commission on Social Security and various comments from high-level White House officials, we have a pretty good idea of where this is going.

The central component this administration is pushing involves diverting a part of your Social Security payroll tax to private accounts. As a result, your guaranteed benefit will be cut, leaving you with lower overall retirement income.

The Social Security system is not facing bankruptcy as Bush has suggested. But if the president has his way, future retirees will be worse off. Bush wants to dismantle our most successful social program and turn our money over to Wall Street investment firms that will make billions of dollars administering the accounts from fees that we pay.

Bush has conceded that creating private accounts will do nothing to improve the financial condition of the Social Security system. In fact, by diverting payroll taxes away from the system, it will get worse. Not only will there be less to pay out in benefits, there won’t be any surplus to go into the trust fund. Then there really will be a crisis.

Even if you were to choose not to invest into the private accounts, your benefits still would be cut. The Bush administration wants to change how benefits are calculated for new retirees by linking them to the growth in prices rather than the growth of wages. Since wage growth is generally higher than inflation, this change equals a benefit cut that gets bigger every year.

According to Business Week magazine, if benefits had been based on the inflation calculation since Social Security was enacted, today’s retirees would be taking home only $425 a month, as opposed to the $955 the average retiree now gets.

We agree Social Security faces long-term challenges, but not a crisis. This system has been a great success and a bond of solidarity between the generations. Without the guaranteed benefits, more than 50 percent of our seniors would live in poverty.

We value our senior citizens. In order to secure their futures and the future of every generation, we must make well-thought-out decisions. When Bush convened his Social Security commission in 2001, its members were only those who shared his view on privatizing the system. That is not coming to the table with an open mind.

There are other solutions to consider, such as raising the cap on the amount of wages subject to the Social Security payroll tax. Currently, only the first $90,000 of wages is subject to the tax. If this cap were removed, wealthy individuals would have to pay taxes on their entire earnings just like working families. With this simple change, the system would face no funding gap over the projected 75 years.

Let’s keep Social Security secure and not cut the safety net for our most vulnerable citizens. Working people should get the benefits we’ve paid for.