Washington Office criticizes proposals to overhaul Social Security system
The Layman Online, July 19, 2005
The Washington Office of the Presbyterian Church (USA), without offering any documentation, is attacking President George W. Bush’s plan to overhaul the Social Security system – saying that “public distaste … has taken some of the steam out of the drive to overhaul the program.”
In an e-mail sent to Presbyterians around the country, the Washington Office paints a bleak picture of efforts in Congress to address the problems plaguing the system, but it criticizes one proposal that provides personal accounts invested in the stock market by saying that, “if it performs poorly, of course, retirees would be worse off than they are now.”
The e-mail also links, again without providing documentation, funding for Social Security with funding for the Temporary Assistance to Needy Families program, saying that funding in the latter program “would be jeopardized by the current proposals to divert part of Social Security’s future income into the stock market.”
The complete text of the Washington Office’s e-mail is as follows:
“It is unclear what, if anything, Congress will do to remedy the problems, both real and perceived, of the Social Security program. Public distaste for the President’s plan, which has never been fully spelled out, has taken some of the steam out of the drive to overhaul the program.
“The House Ways and Means Committee appears to favor creating a temporary system of private accounts for retirees, using funds drawn from the current temporary surplus in the Social Security account. The Senate Finance Committee, despite having no agreement on how to proceed, has begun drafting legislation that will, at least in the beginning, include permanent private accounts.
“Attention has focused primarily on the White House proposal to divert part of each worker’s contribution to Social Security into a personal account, which would be invested in the stock market. If the market performs well, annuitants might receive higher benefits than they would under the current program. If it performs poorly, of course, retirees would be worse off than they are now.
“Overlooked in the discussion about privatizing the nation’s primary pension program for retired workers, however, is the role Social Security plays in the lives of millions of children. According to the U.S. Census Bureau, more than five million children lived in families that received Social Security benefits in 2002. Some of these children live in families where someone else receives benefits that are shared, but many of the children themselves qualify for Social Security because they are the survivors or dependents of a deceased, disabled, or retired person who worked long enough to qualify for Social Security.
“The Census Bureau report shows that in 2002, benefits from this program raised one million children under 18 above the poverty line, more than double the number lifted out of poverty by Temporary Assistance to Needy Families (TANF), the nation’s primary welfare program.
“Funds available to help these very needy children would be jeopardized by the current proposals to divert part of Social Security’s future income into the stock market. Such proposals do not address the real problem confronting the program, which is that the population is aging and living longer on Social Security benefits, while the income going into the program in future years will not be sufficient to cover the benefits for which the government has an obligation.
“There are two immediate ways to address this problem: One is reducing benefits; the other is increasing income to the program. The Bush Administration and congressional leaders favor reducing benefits and regard increasing income to the program as a tax increase, since the most obvious way to do it is to require current and future workers to put more of their earnings into the program.
“Workers now invest 6.2 percent of their salaries, up to $90,000 per year in earnings, in the Social Security programs. Their employers contribute a like figure. Several congressional proposals involve raising the base figure to various levels, ranging from $140,000 to $200,000, while some would remove it altogether. The Administration is vigorously opposed to making this change, as are many business groups – who oppose requiring employers to make increased contributions.
“Congress appears to be in complete disagreement over the nature and extent of the problems facing the Social Security program, as well as over the ways to address the problems they have identified. With no progress this year, and with congressional elections in 2006, it is possible that the nation’s pension program will remain essentially unchanged for another few years.”