Briefing Book

White House Conference

United Seniors Association, Inc. Working to protect the retirement security of all Americans. 3900 Jermantown Road, Suite 450 Fairfax, Virginia 22030 (703) 359-6500 fax (703) 359-6510 www.unitedseniors.org PRINCIPLES FOR SOCIAL SECURITY REFORM Social Security is in serious financial trouble. By 2013, just 15 years from now, the program will begin running a cash deficit. By 2032, even if all the money owed to Social Security is repaid, the trust fund will be exhausted. In addition to staving off insolvency, another critical reason for reforming Social Security is to give working Americans the opportunity to build real wealth for true retirement security. Raising taxes is not the solution to Social Security's looming fiscal crisis. The Social Security payroll tax has exploded from 2 percent in 1937 to 12.4 percent today-a sixfold increase. Nor is the solution to cut benefits to current retirees. Today's seniors paid into Social Security their whole lives with the expectation that they would receive a certain minimum level of support. To change the rules on them now would be unfair. The time has come to redesign Social Security and to begin the transition to a funded pension system based on personal retirement accounts backed up by a federal safety net. Following are the principles that United Seniors Association believes should serve as the basis for successful reform of Social Security: The federal government must guarantee all benefits promised to current beneficiaries and those nearing retirement. Workers should be allowed to establish their own personal retirement accounts and to privately invest a portion of their Social Security payroll taxes. Retirees and workers should be given ownership of trust fund assets. Saving the existing Social Security program or paying for the transition to an improved retirement system must be accomplished without raising taxes. The federal government should not, under any circumstances, be allowed to privately invest workers' retirement funds, nor should the government be permitted to regulate how workers privately invest their own funds beyond that required to ensure safety and soundness.