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Economic Security 20001522 K STREET, N.W.SUITE 634 WASHINGTON, DC 20005 TEL 202/408-5556 FAX 202/408-5352
621 DELAWARE STREET
205 EAST 42ND STREET
www.economicsecurity2000.org Creating a Nation of Savers
Hillary Beard, Executive Director, Economic Security 2000: Economic Security 2000 is the first non-partisan grassroots group dedicated to reforming Social Security. Our grassroots role was inspired in 1995 by U.S. Senators Bob Kerrey and Alan Simpson when they told us Congress would not act until 15 to 20 million Americans say, "Mr. President: Act immediately to save Social Security, and let me own a piece of my payroll taxes." That is our crusade - to educate and provide a means for activism. Our goal is to open savings and security to all Americans. Our staff and volunteers represent many ages, races and politics. They work tirelessly, because they believe individual accounts provide the best answer to fixing Social Security. Not one amongst them who believes the safety net can be jeopardized. Not one believes that risk should be part of Social Security reform. Not one does not fight for the concept that all Americans should have better retirement security and should be cut back into the American dream by owning wealth. I asked a few of our volunteers and staff members to write a about what they do and why. They wrote much more, so I have taken nuggets from each, to give a sense of what they do and what they hear. Carolyn Cox, 60's, Retiree, Colorado: There is no average week in grassroots work. We work parades, fairs, service clubs, schools and senior centers to add new activists and educate. We write letters-to-the- editor and Op-Eds, refuting bad information and reinforcing that workers should own personal retirement accounts. We talk about Social Security with everyone we meet, seeking new ways to educate. Hilary Wehner, 20's, Regional Field Director (RFD), Northeast: After long hours reaching out to schoolchildren, local service organizations and all who listen to radio and television, I lay my head down at night knowing that when real reform comes, it will be based on knowledge and the full involvement of the American people. Damon Elder, 20's, RFD, California: Social Security reform appeals to patriotism over partisanship and is called for from all sides of the political spectrum. Our job is to increase the volume of the cry for substantive reform, and to mute the demagogic attacks of those whose love is for political gamesmanship rather than for America. Paul Pomeroy, 20's, RFD, Mid-Atlantic: Whether making a presentation, working with interest groups, or leveraging activists, I start each week with one basic question: What am I going to do in the next seven days to save Social Security? Mike Marshall, 30's, ES 2000 Field Director and Chairman, U.S. Jaycees, Midwest: Many say young Americans don’t care. Not true. They just don't feel they have a voice. ES 2000 and the Jaycees create ways, like the Billion Byte March using email, to involve the young. Cynthia di Lorenzi, 40's, Single Mother & Volunteer, Texas: I work on behalf of my children and for those who feel they have no voice. Never have I participated in a greater opportunity to help all Americans and the nation! Looking back, Social Security lifted millions out of poverty. Looking forward, individual accounts are required to continue that legacy. Through grassroots, I can reach out to those who feel most disenfranchised. Eaddy Roe, 30's, RFD, Southeast: Seniors look for workable solutions, too. The proof is in the details, and many like the details of individual accounts. I have met too many who receive Social Security of under $500/month. They have nothing else. They worry about their children and grandchildren. From a 75year old, “My son is self- employed, and he pays 15% just for himself. You young people need to get involved.” Rob Crowther (30's)/Ben Glover (20's), Volunteers, Northwest: Students get involved when we take the time to explain Social Security. When they do, the whole student body can too, as is happening at Seattle Pacific University. There, professors send classes to ES 2000 events; publications write stories; students talk to faculty, friends and family. Billye Hansen, 5O's, Volunteer, Oklahoma: I work on this so my grandchildren will not be faced with huge debt. As we approach Oklahomans about the Billion Byte March, we found approximately 98% favor some form of individualized Social Security savings. A. Silver, 40's, RFD, New York: Half of all black men die before 65. They "save" through Social Security, but get nothing back. When you show how individual accounts allow minorities to own equity to leave to their children, they get excited. Still, few bother to educate low-income. When talking with low-income workers, so many say, "I want to own and invest my Social Security." My Conclusion: As for me, I constantly am asked, "Why are you working to reform Social Security?" I am a 25-year old female Democrat. According to Washington wisdom, I should hate personal retirement accounts. Instead, I believe personal retirement accounts will benefit those Americans who have neither economic nor retirement security. The political rhetoric makes me furious. Often, partisans use alarming technical questions to bolster their point of view, rather than solve problems. Investment risks, administrative costs, and transition costs all can be addressed. Management goals can be achieved through what Franklin Roosevelt called "bold, persistent experimentation." Examine the $10,000/year worker - an income increasingly prevalent since middle-income manufacturing jobs at $35,000-$40,00O/year are scarcer. At $10,000, workers pay $1,240 a year to Social Security. That is more than 60% of American families own in total savings. This $1,24O/year payroll tax can help open meaningful savings. Workers understand this. An AFL-CIO poll shows their members are in favor of owning individual accounts. Support only drops off when the next question is, "Do you favor individual accounts if your taxes will go up or if benefits are cut?" This question is disingenuous. We need to be creative enough to not raise taxes or cut the below-average income safety net in the process of creating individual accounts. Adding individual accounts to Social Security is bold and uncertain. One certainty is that Social Security the old way undermines the system's goals. Most of us share a common goal. The basic question each Social Security reformer should ask is this: If we had no Social Security in 1998 and were trying to create a system, what would the goals be and how would we achieve them? I don't think anyone would create a pay-as-you-go system. And I do think we would find a system in which the money workers earned themselves would be put to work for their own retirement.
WHITE HOUSE SOCIAL SECURITY SUMMITSam Beard, President Economic Security 2000 Thank you very much for inviting me to participate in the White House Summit. I've had the privilege of founding and chairing economic development programs in poor urban and rural communities for four United States Presidents which have resulted in over $25 billion of investment, and I try to bring this expertise to bear on Social Security reform. Economic Security 2000 is a non-profit grassroots organization that has chapters in 41 states and 88 cities. For over five years, we have made four basic points. - First, Social Security is the best and most vital federal program. In every case we need to retain every penny of the Roosevelt contract of protection and the safety net. This includes disability insurance and survivors benefits. All safety net aspects of Social Security are not negotiable. For low-income families, most Social Security payments are too low. Thanks to Social Security, seniors living in poverty have been reduced from 3 5 to 10.8 percent, but let's commit ourselves to reduce seniors living in poverty to zero. - Second, the pay-as-you-go system as set up in 1935 is outdated and needs to be updated with a funded system with individually owned savings accounts invested in the private sector. With changing demographics, once the Baby Boomers retire, there will only be two workers asked to finance one senior. This ratio no longer works without excessive tax rates. One third of all women born today can expect to live to over one hundred. - Third, the Social Security dialogue misses two key issues. #l. Retirement insecurity. President Roosevelt talked about retirement security as a three-legged stool. Leg 1 is savings. Leg 2 is a pension. Leg 3 is Social Security, which was never meant to be more than a safety net. 60 percent of American families have limited or no savings or a pension. We need to restore Legs One and Two. #2. The increasing wealth and income gap between the rich and the poor. On our current course, we are becoming two separate societies, which places the American Dream at risk for up to 60 percent of American families. One third of all income comes from savings and wealth, and the bottom half of American families own less than 2 percent. After a lifetime of work, half of all African-American and Hispanic families do not own a dime. Participation in the American Dream requires capital. The door openers to opportunity include higher education, home ownership, business ownership, and retirement security. The opportunity lies in savings and compound interest. - Fourth, we outline the fast-expanding American and international financial markets, which exceed $45 trillion today and will double early in the next century.
What are our suggested solutions? As we are on the threshold of the 2lst Century, we are entering "The Equity Age." Let's allow all Americans to benefit from the power of compound interest and own a share America's economic growth over the next century. One choice is to shape our answers using 1935 ideas, or we can use 2035 ideas. As we entered the 20th Century, we entered "The Industrial Age." The symbols of "The Industrial Age" are mass production and assembly lines and Henry Ford's Model T and his $5 per day wage. This led to the "democratization of wages" and opened the purchasing power and dreams of the middle class. As we head to the 21st Century, let us democratize the ownership of wealth and savings and usher in "The Equity Age." Through Social Security, retain its progressivity and allow all Americans to set aside $500 per year, preferably $1,000 per year, into an account they own invested in the private sector. In a working lifetime, this can accumulate $150,000 (today's $ constant.) Set aside $2,000 per year, and you can accumulate over $300,000 - the financial assets of today's 95th percentile richest American. The second vehicle to open equity accumulation for all is Kid Save. The original Kid Save sets aside $1,000 for every American at birth, and adds $500 per year for the first five years. This money is invested and grows for 18 years. At age 18, each American then has a nest egg of an estimated $30,000 to $50,000 for higher education, home ownership or business ownership. The money can be retained for retirement security or used as a second source of income. Some people talk of encouraging voluntary savings. I favor voluntary savings, but 75 percent of American families earn $50,000 or less. They are living from paycheck to paycheck and have a difficult time paying their monthly bills. There is no surplus income for savings. Save every penny of the Roosevelt contract and the floor of protection. Save "Security." But add individual funded accounts. Broaden the debate. Let's democratize the opportunity for wealth accumulation and embrace "The Equity Age."
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