August 12, 2005

Reid Celebrates the 70th Anniversary of Social Security

We Should Work to Strengthen Social Security, Not Dismantle It

Democratic Leader Harry Reid released the following statement to commemorate the 70th Anniversary of Social Security on August 14, 2005:

“Seventy years after Social Security became part of the basic fabric of our nation; it continues to play a key role in the lives of millions of working Americans. By lifting 13 million elderly Americans out of poverty, providing assistance to over 8 million Americans with disabilities and over 6 million surviving spouses and children, Social Security is more than just a retirement program, it is a social insurance program that keeps American families working.

“As we celebrate its great success, Senate Democrats continue to work to strengthen Social Security, not to dismantle it through a risky privatization scheme. Deep benefit cuts and trillions in new debt is no way to honor the great legacy of President Franklin Delano Roosevelt.

“Social Security does face a long term financial challenge and Democrats stand ready to work in a bipartisan way to strengthen it. Democrats also want to address retirement security more generally by making it easier for Americans to save, fixing the pensions crisis and addressing long term health care costs.”

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SOCIAL SECURITY’S 70-YEAR SUCCESS:

Social Security Provides Benefits to 48 Million Americans. Social Security provides crucial benefits to 48 million Americans. In addition to the over 33 million Americans who receive retirement benefits, over 8 million receive disability benefits and over 6 million receive survivors benefits. [Social Security Administration]

Social Security Lifts 13 Million Elderly Americans Out of Poverty. Social Security’s crucial benefits to elderly Americans helps to life 13 million out of poverty. Without Social Security, nearly 50 percent of elderly Americans would live in poverty. [Center on Budget and Policy Priorities, 2/24/05]

Social Security Plays a Crucial Role in the Lives of African Americans, Hispanics and Women. Social Security’s progressive benefit structure and array of benefits play crucial roles for many of our communities. For African Americans, Hispanics and women, Social Security provides essential benefits.

• While roughly 13 percent of the population is African American, 23 percent of children receiving survivor benefits and 21 percent of children receiving benefits due to a disabled worker parent are African American. [SSA, "Social Security is Important to African Americans," September 2004]

• Hispanics have a longer lifespan on average than other Americans and therefore benefit from Social Security’s annual cost of living adjustment and its spousal benefits. In addition, the Government Accounting Office found that, “in the aggregate, blacks and Hispanics have higher disability rates and lower lifetime earnings, and thus as a group tend to receive greater benefits relative to taxes than whites.” [SSA, “Hispanic Americans and Social Security,” 9/04; GAO, “Social Security and Minorities,” 4/03]

• Social Security's progressive benefit structure provides some relief for women who still suffer from equal pay disparities. Lower-income workers receive a higher percentage of their earnings in Social Security benefits in retirement than higher-income workers. [Census Bureau; U.S. Treasury Department, "Progressive Returns to Social Security?" 11/95; Mercer Human Resource Consulting, "Women and Social Security: Important Issues for Financial Security for Older Americans," 5/21/04]

Bush’s Plan Will Cut Benefits by 45 Percent or More for Seniors. The Republican plan will reduce benefits for all seniors, even those who choose not to invest in privatized accounts. According to the Congressional Budget Office, “benefits for the 1980s birth cohort would be…30 percent lower…and benefits for the 2000s cohort would be…45 percent lower.” [CBO, “Long-term Analysis of Plan 2 of the President’s Commission to Strengthen Social Security,” 7/21/2004, pp. 11 and Figure 2A]

The DeMint Scheme Will Weaken Social Security and Increase the Debt. According to the Social Security actuaries, the DeMint plan will weaken Social Security and make solvency more difficult to achieve. The plan will eliminate three years from the solvency of Social Security, requiring about $1 trillion in general revenues to simply return the Trust Fund to its current 2041 insolvency date. The Social Security actuaries also reported that, “The total debt held by the public is increased indefinitely due to the incomplete compensation of the trust funds through benefit offsets…Annual unified budget balances remain worsened throughout the period due to additional interest on the increased debt held by the public.” The plan will add $1.7 trillion to the debt in the first 20 years. [Social Security Actuarial Memo, 6/23/05; Center on Budget and Policy Priorities, 6/23/05]

Republican Leaders Plan a Bait and Switch. “Senate Republican leaders are considering whether to seek Democratic support for Social Security legislation without the personal accounts sought by President Bush, aiming to restore them later, officials said Thursday.” [Associated Press, 4/8/05]

DEMOCRATS ARE COMMITTED TO STRENGTHENING SOCIAL SECURITY:

First Do No Harm. Democrats recognize that Social Security faces a long-term financial challenge. We are ready to work with President Bush to strengthen Social Security but we need to get it right. That means doing no harm and not cutting Social Security’s funding by diverting trillions of dollars out of the Trust Fund.

Pay Back Social Security. Democrats believe that we have an obligation to pay back the Social Security Trust Fund for all the money used for other purposes.

Promote Savings. Americans do not save enough and we should find ways to make it easier for families to save for the future. We should explore incentives for personal savings and increase public saving by restoring fiscal discipline and ending raids on the Social Security Trust Fund.

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