When President Franklin D. Roosevelt established Social Security during the Great Depression, millions of workers had lost their life savings and faced poverty and deprivation. For them and for all of us, Social Security has guaranteed a dignified retirement and a measure of comfort and security.

 

Because Social Security started paying benefits at the same time it started collecting taxes, the program operates on a "pay-as-you-go" basis: the taxes paid by today's workers go directly to pay benefits for today's retirees.

 

This generational compact has worked for almost seventy years. However, Social Security faces real challenges in the future. The "Baby Boom" generation will soon begin to retire, increasing financial strains on the program. By mid-century, taxes will be enough to pay for only three-quarters of benefits.

 

It is never too early to plan ahead to bolster Social Security’s long-term solvency.  Unfortunately, I believe that President Bush's approach to Social Security has not been promising.  Not only has he not included Democrats in discussing Social Security's future, he has also ruled out sacrificing his tax cuts for millionaires.  What he has left on the table is significant benefit cuts.

 

President Bush is reported to be considering a plan to tie Social Security adjustments to the consumer price index, or CPI, instead of wage growth.  I strongly oppose any such benefit cuts.  Tying benefits to the CPI would cut benefits for future retirees nearly in half and devastate seniors who rely entirely or mostly on their Social Security checks. 

 

The President's proposed plan to fix Social Security is to privatize parts of the program, as much as 40 percent.  This approach is no answer to Social Security's financial challenges.  In fact, his plan would make shortfalls even worse.  Because the money diverted into private accounts would no longer pay benefits, Social Security would face an immediate shortfall of $2 trillion over the next ten years and $7 trillion over the next 75 years.  I believe that privatizating Social Security - in whole or in part - would not only undermine Social Security’s basic guarantee, but it would also sink America $2 trillion deeper into debt at a time when we are borrowing an unprecedented amount of money from abroad in order to pay our country’s bills. 

 

I believe we can meet Social Security’s long-term challenges without undermining the most successful and important government program ever.  There are a variety of options that should be seriously considered.  For example, if Congress simply rolled back the President's tax cuts for the top one percent of income earners, whose annual incomes average $1 million, we could preserve Social Security for 75 years without any other changes.   

 

In terms of encouraging savings and investment, I believe a better approach would be to leave Social Security's safety net intact and create other incentives outside of Social Security.  For example, we could propose a “Universal 401(k) Plan” with matching contributions for low- to middle-income workers who have trouble scraping together savings.

 

Social Security has been the most successful government program ever created. Today, 47 million Americans rely on retirement, survivor, or disability benefits. Social Security has reduced the poverty rate among seniors from 50 to 10 percent. Social Security is particularly important to women – benefits provide nearly three-quarters of the average elderly widow’s income.  This sacred trust between the generations has ensured 70 years of fairness for Americans of all ages and income levels.  No change should be considered to Social Security that is not intellectually honest and bipartisan.