Social Security

Created in the midst of the Great Depression, Social Security is unquestionably the most important and popular domestic program of the United States government. Estimates show that without Social Security, 48% of individuals over the age of 65 would live in poverty.

Over the last 60-plus years, financial issues have periodically beset Social Security, and we currently face another potential problem. The Social Security Trustees report the program's benefit obligations will exceed its annual tax revenue in 2018, resulting in annual cash shortfalls. While the government will continue to pay benefits, 2018 will mark the beginning of a long-term financing problem.

Americans are living healthier and longer lives, while at the same time, we're having smaller families. As a result, there are more retirees drawing benefits for longer periods, while there are fewer workers contributing to the trust fund. In 1940, there were more than 40 workers per beneficiary. In 1960, there were five workers for every beneficiary. Before long there will be just two workers per beneficiary. The combination of longer life expectancies and declining birth rates is putting a tremendous squeeze on the existing system. Congress must act soon to address these long-term deficiencies.    

Even though the President has stated several times that he plans to address Social Security reform in the near future, he has yet to submit a detailed plan to Congress. However, it has become clear that the President’s plan will include diverting some portion of Social Security funds into private accounts. 

Ensuring the long-term solvency of the Social Security program is an absolute necessity. However, I am troubled by some of the statements coming out of the Administration that they will borrow the money needed to pay for the transition into private accounts. Since private accounts would need to be funded out of the same pool of money that pays current Social Security benefits, there would be fewer resources available to pay benefits to current retirees. This shortfall would need to be made up to preserve benefits for people who will retire during the transition from the current system to the new system. Nearly all the estimates available for reform proposals show that there is no way to transition from our current Social Security defined benefit program to a privatized plan without adding trillions in government debt. This new debt would be added to the already staggering $7.5 trillion federal debt.

Many economists are concerned that the rapid increase in the federal debt that would be necessary to create a privatized Social Security system, when combined with the annual deficits we have been accumulating since 2001, is going to have a profoundly negative affect on our economy.

Social Security solvency is critical for our nations’ retirees and many questions remain as to how best to achieve this goal.  As a member of the House Ways and Means Committee, which has jurisdiction over Social Security reform, I will be working to ensure the Social Security program is solvent for generations to come --without adding to the crushing debt burden American taxpayers already face.

Related News:

• Hagel, Tanner Propose Commission on Long-Term Future of Social Security, Medicare, Medicaid (Oct. 19, 2005)
• Social Security Fixable Without Borrowing Trillions More Dollars
  (April 20, 2005)
• Tanner: We Should Strengthen Social Security Without Borrowing Trillions of Dollars (March 30, 2005)
• Tanner: Congress Should Carefully Consider, Pay for Social Security Reform (Feb. 2, 2004)
• Tanner Backs Greenspan's Call for Budget Discipline (Sept. 12, 2002)
• New Scorecard Shows Tanner's Commitment to Social Security, Medicare (Sept. 10, 2002)
• Tanner Presses Congress to Toughen Debt Policies; Proposal Would Have Protected Future Generations (June 12, 2002)
• Tanner Fights Attempt to Raise National Debt (May 22, 2002)
• Tanner: 'Secure our Children's Future Today'; Blue Dog Coalition Unveils Outline to Restore Fiscal Responsibility (April 25, 2002)
• Tanner Responds to President Bush's State of the Union Address
  (Jan. 29, 2002)
• Tanner Ready to Tackle Issues; War, Budget, Farming Top Legislative Agenda (Jan. 23, 2002)
• Tanner Wants Budget First that Makes Room for Tax Cut, Debt Payoff; Says 'House Putting Cart Before Horse' (March 8, 2001)
   

Resources:

• Social Security Online