Conservatives' 67th Birthday Wish for Social Security
July 7, 2008 - 7:29 PM
Capitol Hill (CNSNews.com) - A group of conservatives gathered in Washington Wednesday to wish the Social Security program a happy 67th birthday, and to make their birthday wish on behalf of the program.
Jim Martin, president of the 60-Plus Association, says his birthday wish for Social Security - which was signed into law on August 14, 1935 - is a discussion about reforming the program, free of the political misinformation that has dominated the debate in the past.
"Nobody, but nobody is going to take away Social Security from senior citizens," he said. "If any politician in either party says that's the case, that's demagoguery at its worst and, quite frankly, they should have their mouth washed out with soap."
"In the past ... any effort to discuss reform was shouted down as if somebody wanted to eliminate Social Security as opposed to strengthening it," said Grover Norquist, president of Americans for Tax Reform. "It hasn't happened and it won't happen."
Norquist explained that many more Americans now have experience with, and understand the basics of investing than did during previous election cycles.
"They just can't scare people the way they used to," he added. "Although, I bet you a nickel they try at least one more time this November."
Former Congressional Budget Office Director Rudolph Penner, who now serves as an economist and senior fellow at the Urban Institute, says the "golden age" of Social Security is over.
"Just as its 'pay-as-you-go' nature allowed it to be very generous while everything was going right," he explained, "now its 'pay-as-you-go' nature is the source of its problems."
Penner says that, when Social Security was instituted, a large number of workers were paying relatively low taxes to cover the cost of fairly inexpensive benefits. But as more seniors have lived longer, and as working adults have had fewer children, the equation has changed.
Now, he says, the program is barely taking in enough money to cover its ever growing expenses.
"The system will be adding to the overall budget deficit in 15 to 20 years," he added, "and that problem grows and grows over time."
The answer, Penner believes, is to move to a system that keeps current and soon-to-be retirees in Social Security, but allows younger workers to direct a small part of their Social Security taxes into stocks, bonds, money market accounts, and other personal investment accounts.
"The recent decline of the stock market makes it more difficult to sell individual accounts to today's voters," he said.
"Nevertheless, someone foolish enough to be 100-percent invested in the stock market on the eve of his or her retirement at the low of the market in July would still have earned a better return on their investment than can be promised by the Social Security System," Penner added.
As those investments grow, workers can be slowly "weaned" from the government system. Eventually, supporters believe, no one will want to contribute to Social Security because of the higher returns available even from a "failing" stock market.
Phyllis Berry Myers, president of the Center for New Black Leadership, says she is tired of both the scare tactics used by opponents of personal retirement investments, and the condescending attitude of so-called "leaders" in the African-American community who support the current system.
"It is really insulting to me when the so-called 'civil rights leaders' tell African-Americans that they are incapable of learning how to invest and save," she said.
"When others tell us that we are too stupid, that we cannot save, that we cannot understand the complexity of the policies, [and] that we need government to always make decisions for us, that's highly insulting," Myers added.
Norquist hopes the debate can focus on how little Social Security gives to beneficiaries in return for the great deal that it takes from them and their descendants.
"Those people who haven't yet built up wealth within a family don't get a chance to," he explained, noting that if a worker dies before reaching retirement age, their family cannot claim the money the worker paid into the system. "The Social Security tax replaces what would be the accumulation of wealth for families."
As the facts about the poor performance of Social Security and the drain it will place on the federal budget in the future become better known, Norquist hopes support for personal retirement investment options will grow.
"A majority of Americans own stock," he added. "They see prices go up and down and they understand that there is a security there, and that they have more control."
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