Social Security is one of America's most successful government programs. It has helped millions of Americans avoid poverty in old age, upon becoming disabled, or after the death of a family wage earner. Approximately 47 million Americans receive a monthly Social Security check.
Current estimates indicate that Social Security outlays will exceed income provided by the payroll tax in 2017. Without congressional action, the program will reach insolvency in 2042, when it will only be able to pay out 70 percent of current benefits.
The President’s Commission on Social Security has proposed changing Social Security to a system of individually controlled accounts where taxpayers can invest their Social Security funds in the stock market. I am concerned about this proposal for many reasons. First, private accounts are much more costly to manage. Some estimates show that administrative costs could consume up to 40 percent of the accumulated lifetime account balance for a typical worker. There is also little evidence that individual accounts will have a greater rate of return than Social Security. Furthermore, some studies show that by diverting portions of the trust funds to start up individual accounts, we could seriously threaten the financial stability of Social Security.
If the Administration's privatization plan were in effect today, nearly 2 million Texans would see reduced Social Security checks. The average monthly benefit cut for Texans would be $251, and the benefit reduction for each Texan opting for a private account would be $654 a month.
I support maintaining our current fiscal policy so that the minor changes that will be necessary to sustain Social Security can be made without jeopardizing our economy or the program. We need to make sure Social Security continues to provide the retirement safety net not only for our parent's generation, but also for our generation and our children's generation. I oppose privatizing Social Security because we could all lose that safety net.
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