Lincroft, NJ --- U.S. Rep. Frank Pallone, Jr. (D-NJ) today met with college students at Brookdale Community College to listen to their opinions about President Bush's general proposal to partially privatize Social Security. The New Jersey congressman's visit with the college students is part of a daylong Social Security listening bus tour throughout the state.

Pallone realizes that a lot of younger Americans believe that Social Security will not be there for them when they retire in the future. However, the numbers show that's simply not the case. According to the latest numbers from the nonpartisan Congressional Budget Office (CBO), Social Security is solvent until 2052, and after that, the program will still be able to pay 70 to 80 percent of benefits.

"A 20-year-old today, who retires in 2050, should still have access to the same Social Security program that gave his or her grandparents independence in their senior years," Pallone said. "Young Americans cannot be deceived into believing Social Security privatization will leave them better off in their senior years than the current program.

"In fact, President Bush's privatization plan negatively affects younger Americans the most," Pallone said to the students at Brookdale Community College. "Consider that a 20-year-old entering the workforce this year would lose $152,000 in Social Security thanks to the more than 40-percent benefit cut needed to pay for the private accounts. A private account is unlikely to make up for this benefit cut because the plan also takes back 80 cents for every dollar in the private account through a 'privatization tax.'"

Pallone told the students the privatization tax stems from the money private account holders will be forced to pay back once they retire. For example, if a 28-year-old man decides today to set aside four percent of his Social Security payroll payments each month into a private account and during the lifetime of that account he accrues a five-percent rate of return, he'd only get to keep two-percent of that and the rest would go back to the government. That's because, under the president's general plan today, the government would take back all the money it gave the individual to invest, as well as three-percent, the average interest Social Security funds normally accrue in government bonds.

"Thanks to the current trend of employers refusing to continue traditional pension plans and switching to defined-contribution retirement plans that leave workers on their own, today's younger workers will need Social Security's guaranteed retirement benefits every bit as much as today's retirees, Pallone said. "If the president really wanted to strengthen Social Security's future, he'd create a bipartisan commission to explore ways to extend solvency beyond 2052. That's what President Reagan did in 1983 when Social Security was in a real crisis, and he and Democratic House Speaker Tip O'Neil worked together to strengthen the program for seventy years."