AMERICANS DISCUSS SOCIAL SECURITY NATIONAL INTERNET DIALOGUE

WHY REFORM NOW?

Rep. Karen L. Thurman

APRIL 22, 1999

Addressing the future of Social Security is not about crisis, but rather it is about opportunity.

According to the Social Security and Medicare Boards of Trustees, the insolvency of Social Security is projected to be extended by two years, meaning the government will have enough revenues to pay promised benefits through 2034.

I am delighted that there is no immediate crisis in this program. Nevertheless, our Nation is at a unique crossroads--one we have not seen in three decades. Today, we have the opportunity to invest the budget surplus into the future well-being of our Nation. Across party lines, Representatives and Senators generally agree that applying the surpluses to Social Security is in our Nation's best interest. Where we differ, however, is the size and extend of debt reduction, corresponding tax cuts, and, most significantly, the shape of Social Security reform.

I am deeply hesitant to radically change a program that has been so successful for so many. Rather, I believe Congress should invest the unified budget surplus into both Social Security and Medicare. This would reduce our Nation's debt and bolster our economy. In turn, it would strengthen our Social Security system for all American working families.

Since its creation, Social Security has been the nation's most effective domestic program. Today, over 44 million Americans, including over 6 million disabled workers and their families, and over 7 million survivors of deceased workers, receive Social Security. Even more impressive than the scope of Social Security is what it does for the people who receive benefits. In 1935, over half--59.2 percent--of elderly Americans lived in poverty. In 1997, that figure had fallen to 10.5 percent. Almost two out of every three people removed from poverty by a government benefit program are lifted out by Social Security.

More specifically, as I weigh various proposals to reform Social Security, I also must consider that I represent the State with the second largest Social Security recipient population. Without Social Security, 49 percent of elderly people in Florida would be poor. Social Security reduces the elderly poverty rate in my state to 12 percent, a reduction of three-quarters. Furthermore, three of every five elderly people in Florida whom Social Security lifts from poverty are women. Without Social Security, 720,000 elderly women in Florida would be poor.

Based on these figures, I would not call Social Security a failure. For nearly sixty years, monthly Social Security benefits have been there for millions through prosperity and poverty. It has been there through economic upswings and it has been there through loss of employment, stock market drops, family and medical emergencies, divorce, etc. It has been there in the past, and I want to make sure it is there in the future.

Nevertheless, we know that, because of long-term demographic trends, Social Security will need to be improved and strengthened. We should make certain, however, that no change to Social Security will compromise the program's most essential features, including: a gender-neutral, risk-free, lifetime guaranteed benefit (with annual cost-of-living adjustments).

I am receptive to alternative proposals to strengthen Social Security, but let us remember the intent behind Social Security: it is a guaranteed benefit to ensure that, when working adults retire, both worker and spouse will not live in poverty. It is a guaranteed benefit to ensure that unfortunate circumstances do not sink the vulnerable into destitution.

I respect the views of those who, for themselves, would assume the full risk and responsibility that comes with complete privatization and/or the creation of individual accounts. However, as part of this debate, policymakers and the public must understand the potential effects different Social Security proposals may have on all beneficiaries: from those who are confident in their ability to invest in individual accounts, to children benefiting from survivors benefits, to elderly women living month-to-month only on their Social Security check.

As I consider all these issues, I cannot help but think that the decisions Congress makes today will be felt by future generations. During a recent Ways and Means Committee hearing, Federal Reserve Chairman Greenspan agreed stating, "The advantages that I perceive would accrue to this economy from a significant decline in the outstanding debt to the public and its virtuous cycle on the total budget process is a value which I think far exceeds anything else we could do with the money."

For the first time since 1969, Congress has the opportunity to invest the unified budget surpluses into debt reduction. The current battle in Congress, as exemplified by the recent Budget Resolution, is between those who wish to spend the unified budget surplus today on tax cuts and those who wish to apply it to debt reduction. I support tax cuts, but not at the expense of Social Security and Medicare. Like most Americans, I would like to keep more of the money I earn. However, I also understand that I really have two choices--I could reduce the debt and make life easier for my children, or I could spend it all now and let others worry about the future.

By working together, we can strengthen what has been and could continue to be a successful, progressive, guaranteed and portable retirement program.