OPINION & EDITORIAL
Overhauling Social Security
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by Kellie Sanders
Tuesday, September 27, 2005
While the public's attention may be rightly focused on the human toll in the Gulf and on rising gasoline costs, we should not mistake the sudden silence on Social Security for a shift in the coming storm. In fact, the national debate on Social Security is likely to mirror the school semester: while it may be a quiet September now, things will surely peak in the fall. In fact, it is more important than ever that young people continue to pay attention to Social Security and the real-life implications of reform in the shape of private accounts.
The students enrolled in college today are part of the generation that stands to lose the most from private accounts. We are children of parents who will soon depend on Social Security in their retirement years. We are the workers who will foot the bill of any drastic changes to the program. Most importantly, we are the future recipients who would suffer the most drastic benefits cuts.
Politicians clearly recognize our stake in the future of the Social Security program. President Bush continues to target young people as a main audience in his push for private accounts. Without the support of college students, the administration will continue to fight an uphill battle.
Yet while students have only started to engage in this debate, 44 percent of those younger than 30 already believe that the president's plan would decrease a retiree's income, according to a June Washington Post-ABC Poll. As word continues to spread about the harsh realities of carving up Social Security, more students will voice their opposition to dismantling the one pillar of retirement security.
While some reforms are necessary, private accounts are not the answer to a safe and secure retirement. President Bush's proposal for private accounts and broad and deep benefit cuts to the middle class would weaken Social Security and stick our generation with an enormous bill long after he leaves the White House. The president's proposal for so-called progressive price indexing would cut benefits for today's college students by 20 to 30 percent — more than $4,000 each year in cuts. The next generation of kids will face benefit cuts from 28 to 42 percent.
To make matters worse, diverting money away from Social Security, as proposed under the president's plan, would create an astounding $17.7 trillion in additional debt by 2050, according to the Center on Budget and Policy Priorities. Even the more limited private accounts proposal outlined by Sen. DeMint, which could be voted on this fall, would place a $3.5 trillion burden on our generation by 2050.
When the federal government runs up a large debt, less money is available for average Americans to borrow when they want to buy their first house or pay for college tuition. This translates into higher interest rates and slower economic growth, which means fewer jobs and lower wages in the long run. The bottom line with private accounts is simple: we'll pay more, but get less.
True, the Congressional Budget Office projects that the Social Security system will be able to pay only about 80 percent of its obligations to beneficiaries after 2052. But younger workers would still be better off under the current system than under the Bush plan — even if we did nothing.
There are other ways to ensure the solvency of Social Security. We should start with the simplest solutions, such as raising the cap on income that can be taxed under the Social Security program, currently set at just $90,000. Beyond that, we should employ the sensible bipartisan approach that strengthened Social Security in 1983, without entertaining any proposals that would undermine the integrity of the program. If we don't reject private accounts, we could see the makings of another social disaster, one that could be decided this fall but played out for years to come.
Kellie Sanders (klsanders@wisc.edu) is a junior majoring in political science and legal studies, and is the Chair for WISPIRG (Wisconsin Public Interest Research Group).
Anonymous (September 27, 2005 @ 9:28am):
Kellie, do you understand that you have this analyis exactly backwards? It is possible to argue that people in the 40-55 year old sweet spot won't do quite as well once SS is fixed, but college students stand to gain in a big way.
And no, raising taxes is not an option.
