Jay Inslee: Washington's 1st Congressional District
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Social Security
Inslee on Social Security
I am dedicated to saving Social Security and Medicare. Social Security is one of the most successful poverty reduction programs in United States history. Fewer than twelve percent of older Americans today fall below the poverty line, but without Social Security that number would be nearly fifty percent. We have an obligation to provide both current and future retirees with public retirement benefits. I am committed to passing responsible Social Security legislation that preserves benefits and restores long term solvency to this vital program.
The real threat to Social Security at this time, I believe, is the President's fiscal policy. The President cannot accomplish his proposal without reducing guaranteed Social Security benefits and incurring large amounts of new debt. I am deeply concerned that the President's budget policies may have jeopardized our ability to maintain a strong Social Security trust fund, which could be further damaged by making the President's tax cuts permanent. Prior to the passage of the President's tax cut, we had been able to save the surplus to strengthen the Social Security trust fund, which is dedicated fund set up under President Reagan solely to strengthen the Social Security system. The cost of making the 2001 and 2003 tax cuts permanent is estimated at $11.6 trillion, which is triple the size of the Social Security shortfall. Now the administration wants to divert some of the payroll taxes that currently pay for Social Security into private investment accounts. Under the President's plan, Social Security benefits would be reduced, and the government would borrow an estimated $2 trillion over the next ten years to replace the payroll taxes it would otherwise have collected.
The Congressional Budget Office analyzed the privatization plan that is widely regarded as the template for the President's future legislation, and found that total retirement benefits would be less than they are under the current system (they measured payouts from proposed private accounts plus the reduced government subsidy). Estimates showed that the amount available under the privatized system was less even after the year 2050, when the current system is projected to come up short.
Under the President's proposed plan, the only guaranteed winner would be stock brokers and Wall Street investment firms, because they will earn fees to manage millions of new private accounts. The fees will of course come out of any benefits that otherwise would have been paid to retirees. I am also concerned that people who could afford professional investing advice would gain a significant advantage over people with little investing experience, even though everyone would be taking the same risks.
The Concord Coalition has compiled a Congressional Scorecard in recognition of Members of Congress who have made tough choices necessary to balance the budget and put programs like Social Security and Medicare on a sustainable, long-term track. I am proud to be listed on their honor roll for my support of these priorities. I will also continue to look for other ways to improve the economic circumstances of our elderly population.