Preserving Social Security

Last month, Rep. Paul Ryan (R-WI), the top Republican on the House Budget Committee, introduced an alternative budget proposal that would eliminate Medicare and privatize Social Security for older Americans — rehashing failed Bush policies that the American people have soundly rejected.

Ezra Klein explains how the Medicare provisions of the budget alternative would impact America's seniors:

The proposal would shift risk from the federal government to seniors themselves. The money seniors would get to buy their own policies would grow more slowly than their health-care costs, and more slowly than their expected Medicare benefits, which means that they’d need to either cut back on how comprehensive their insurance is or how much health-care they purchase…This proposal would take Medicare from costing an expected 14.3 percent of GDP in 2080 to less than 4 percent. That’s trillions of dollars that’s not going to health care for seniors. The audacity is breathtaking.

The non-partisan Congressional Budget Office (CBO) analysis of the Ryan proposal provisions on social security:

Traditional retirement benefits would be reduced below those scheduled under current law for many workers who are age 55 or younger in 2011…A system of individual accounts would be established in 2012. In that year, workers who are age 55 or younger would be able to participate in voluntary individual accounts, funded with a portion of their payroll taxes.

OMB Director Peter Orszag further explains:

[Rep. Paul Ryan's] plan succeeds in addressing our long-term fiscal problem, which is a significant accomplishment. But let’s examine how he does that. He takes the Medicare program, and for those 55 and below turns it into a voucher program, so that individuals are on their own in the health care market. And the voucher does not keep pace with health care costs over time… He introduces individual accounts, privatization into Social Security. He has significant changes to the tax code that would provide large tax benefits to upper-income households, while shifting the burden onto middle and lower-income households.

Vice Ranking Member for the House Budget Committee Rep. Jeb Hensarling (R-TX) spoke about the Republican plan to privatize Social Security this week on MSNBC's “Hardball”:

But [for] those under 55, we have to start a transition to a new system… I`m happy to say that… I`m willing to say that that part of the social contract is going to have to be reengineered… We had this debate in Social Security a few years ago. Now, ultimately, we weren’t victorious. There will be a transition. If you want to say that those under 55, as a transition, are they going to get the same deal as their parents? No, probably not.

Today, Democratic Caucus Chair John Larson (D-CT), Rep. Linda Sánchez (D-CA) and more than 20 original co-sponsors introduced a resolution in opposition to the Republican proposal to privatize Social Security. Rep. John Larson:

Republicans are dusting off their old playbook and re-hashing old ideas like the privatization of Social Security that the American people have already rejected. Their ideas would end the program as we know it and put the retirement security of millions of America's seniors and workers at risk.

Rep. Linda Sánchez:

When the stock market crashed in 2008, it was apparent that the Republican's push to privatize Social Security was a bad idea. Americans have not forgotten the dangers of tying their retirement security to the whims of Wall Street. It was a bad idea then, and it is a bad idea now. This resolution supports Americans who contribute all their working life to a retirement and want income security in their golden years.

The resolution:

Expressing the sense of the House of Representatives against severe changes to Social Security.

Whereas Social Security has successfully and efficiently provided the foundation for Americans' retirement security for generations and should be preserved for generations to come;

Whereas for 6 in 10 seniors, Social Security provides the majority of their retirement income, and Social Security provides nearly all of the income received by four out of ten widows and other non-married seniors;

Whereas Social Security's essential protections for workers and their families cannot be matched by private savings, which are a complement to, but not a substitute for, Social Security's guaranteed benefits;

Whereas, as one such protection, Social Security provides a guaranteed benefit that one can never outlive, and unlike private savings or investments, is not subject to the ups and downs of the stock market;

Whereas, as another such protection, Social Security benefits are indexed to inflation to maintain purchasing power over time, which is particularly important for women because they live longer on average than men, and the impact of inflation compounds over time;

Whereas, as another such protection, Social Security provides family benefits, protecting not only the worker but dependent children and the surviving spouse;

Whereas, as another such protection, Social Security not only provides a secure foundation of retirement, but it provides essential income to workers with severe disabilities and to survivors, representing, for a typical young family, a $413,000 disability insurance policy and a $430,000 life insurance policy;

Whereas, as another such protection, Social Security's progressive benefit formula ensures that those with the least opportunity to make supplemental provision for retirement receive the greatest degree of protection from Social Security;

Whereas, for 75 years, Social Security has never been a day late or a dollar short;

Whereas the American people made clear in 2005 that they did not seek severe change in Social Security when they resoundingly rejected President Bush's attempt to privatize Social Security in favor of preserving a secure, guaranteed foundation of retirement income free from the risks and losses of the stock market;

Whereas the current minority party plan for Social Security is even more extreme than the plan they advanced in 2005: (1) it cuts guaranteed Social Security retirement and survivor benefits for all workers, whether or not they wish to have a private account; (2) it diverts trillions from the Trust Fund into private accounts–eventually, four out of every ten dollars of Trust Fund contributions would be diverted to private accounts–threatening the ability of the Trust Funds to pay benefits to today's seniors; (3) it increases Federal borrowing by $4,100,000,000,000; and (4) it subjects workers' basic retirement security to market volatility and the risk of losses; and

Whereas privatizing Social Security means benefit cuts, diversion of Trust Fund resources, subjecting individuals to market risk and losses, and increasing federal borrowing by trillions of dollars: Now, therefore, be it

Resolved, That the Congress should stand with the American people to reject severe changes to Social Security, including any and all attempts to privatize Social Security, and instead should commit to work bipartisanly to make common-sense adjustments to Social Security to strengthen it for future generations while preserving its guarantees of secure income and family protection in the event of a worker's death, retirement, or severe disability.