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Social Security
Social Security is one of the most important and successful government programs. Since 1935, Social Security has provided a critical foundation of income for retired and disabled workers. Although Social Security is safe for today’s seniors, it is in serious danger for our children and grandchildren.
Social Security is a pay-as-you-go system. This means that today’s taxpayers are paying the benefits for current retirees. A worker’s payroll taxes are not saved in an account to pay his or her benefits.
Presidential commissions studying Social Security have long issued strong warnings about future insolvency, when the trust fund begins to spend more than it collects from tax revenue. This reality is what has driven the debate on comprehensive reform of Social Security. By 2017, Social Security will begin paying out more than it collects in payroll taxes because the number of retirees has been increasing faster than the number of workers. Without any changes to the system, there will be a 27 percent reduction in benefits to retirees in 2041.
I believe that doing nothing to solve this problem is not an option.
A few of the suggestions to reform Social Security include raising the income cap on payroll taxes, increasing the payroll tax rate, reducing benefits or increasing the rate of return on contributions.
One of the reforms discussed most often is the establishment of personal savings accounts. Personal accounts would allow workers to invest a portion of their payroll taxes into a mix of conservative bond and stock funds. The account would then provide an asset for their retirement and could be passed on to their children.
Social Security is in need of reform and cannot be solved with simple fixes. We cannot allow these problems to be passed along to our children and grandchildren because, with each passing year, Social Security’s deficits continue to grow. I look forward to debating reform proposals and ensuring that they provide the citizens of West Michigan with a reliable safety net upon retirement.
For additional information on the state of the Social Security system and ideas for reform, I have listed below Web sites that can serve as valuable resources.
Social Security Administration
The Alliance for Worker Retirement Security Heritage Foundation White House
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