Senator Kent Conrad | North Dakota

Social Security

"Social Security is one of the most important and successful programs ever created to provide Americans with some measure of income security. The Social Security system, while solvent now, faces a long-term funding challenge, as the Baby Boom generation retires and puts additional strain on the system. We have a duty to make good on our Social Security promises to current and future generations. The sooner we address these challenges, the better. I will work to preserve, protect, and strengthen the Social Security program for today's retirees and future generations of Americans."
--Senator Kent Conrad

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There are more than 52 million Social Security recipients nationwide. Over ninety percent of today's seniors collect a Social Security benefit check, which is often a shield against poverty. Without Social Security benefits, almost half of the nation's elderly -- 48 percent -- would fall below the poverty level. Social Security is particularly important in North Dakota, which has one of the highest rates of beneficiaries on a per capita basis, and where almost a quarter of beneficiaries are 80 years of age or older. In fact, nearly one in five North Dakotans -- more than 115,000 people -- receive Social Security benefits. That's just one of the reasons that Senator Conrad has fought to preserve and strengthen the Social Security system for today's retirees and future generations of Americans.

The Long-Term Funding Challenge
Senator Conrad's Efforts

The Long-Term Funding Challenge

Social Security faces a significant long-term funding challenge. The program is financed with the payroll tax contributions of current workers and employers, which are used to pay the Social Security benefits of current beneficiaries. Today, there are 3.3 workers paying into the system for every retiree - but by 2030 there will be just 2 workers per retiree.

The Social Security trust funds are now enjoying a healthy surplus because the federal government is collecting more in payroll tax revenue than it needs to pay benefits. These surpluses are credited to the Social Security trust funds in the form of special-issue Treasury bonds, which earn interest. Someday, these bonds will be cashed in to pay future benefits.

In 1999 and 2000, after several years of fiscally responsible budgeting, the federal government did not use any of the Social Security surpluses to pay for other obligations of the federal government. Unfortunately, a recent return to deficits, starting in 2001, has required the government to again borrow against the Social Security surpluses to pay for other obligations of the federal government. When the Baby Boom generation begins to retire, new strains will be put on the Social Security system and these bonds will need to be repaid in order to help pay for future benefits. By 2017, payroll tax revenues alone will no longer be sufficient to cover benefit payments, and we will need to start drawing down on the trust funds to cover costs. If the federal budget is in deficit at that time, additional resources will need to be borrowed in order to repay the Social Security trust funds.

By 2041, the assets in the Social Security trust funds will be depleted and the Social Security system will only be able to pay 75 percent of promised benefits. At that time, the federal government will be faced with a choice of borrowing huge amounts of additional money, raising taxes considerably, or significantly reducing Social Security benefits. Senator Conrad is committed to working in a bipartisan fashion to address Social Security's long-term funding challenges and to close the funding gap.

Senator Conrad's Efforts

Senator Conrad believes that we should act sooner rather than later to put Social Security on a sound financial course. One of the first steps is to prepare for the Baby Boomers' retirement by paying down debt so that the nation is in a strong financial position to meet its future obligations. Doing so would allow us to make much less painful choices in the future.

For over two decades, Senator Conrad has fought vigorously to strengthen and protect Social Security. During his tenure, Senator Conrad has:

- Led the fight to protect the Social Security and Medicare surpluses in a lockbox;

- Proposed a budget in 2001 that protected the Social Security surpluses and set aside an additional $900 billion to shore up the program over the long-term;

- Pushed for new budget rules to "Save Social Security First" - before any new tax cuts or new mandatory spending programs;

- Introduced "Truth in Budgeting" legislation with Senator George Voinovich (R-OH) to make sure Social Security funds can only be spent on Social Security;

- Held numerous Budget Committee hearings in North Dakota and Washington, DC to draw attention to Social Security's long-term funding challenges and to find ways to address these challenges;

- Fought against privatization schemes that would significantly reduce guaranteed benefits and require massive borrowing;

- Fought to ensure adequate funding for SSA field offices so that they can continue to provide a full-range of in-person services to seniors and disabled persons;

- Introduced legislation with Senator Judd Gregg (R-NH) to create a Bipartisan Task Force for Fiscal Responsible Action, which would bring Congress and the President together to address our nation's long-term fiscal imbalances, including Social Security.

Senator Conrad is eager to work in a bipartisan fashion to preserve and strengthen the Social Security program and close the long-term funding gap. He believes that any reforms to the program must maintain the basic Social Security benefit guarantee and protect low- and moderate-income workers. He is opposed to drastic benefit cuts, to payroll tax rate increases, and to any fiscally irresponsible schemes that would require massive borrowing or that rely on budget gimmicks and Enron-like accounting to mask costs. In addition, he strongly supports efforts to improve and expand retirement savings and investment incentives - particularly among those who are not covered by employer-provided pension plans.

Senator Conrad believes that the funding challenges facing Social Security are not insurmountable. He believes that responsible reforms of the program can be achieved to ensure Social Security continues to serve generations to come.

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Senator Conrad calls for investing Social Security surplus instead of allowing the surplus to be spent and replaced by IOUs -- creating a "revenue gap" that contributes to the growing challenge of financing retirement and disability benefits.