SOCIAL SECURITY:

1
SOCIAL SECURITY AN INCREDIBLE SUCCESS
What You Need To Know About the Threat of
Privatization
2
Social Security An Incredible Success
"Does Social Security have a financing
problem? Yes. Will Social Security ever go bust?
No."

• David Walker, Comptroller General of the United
  States
• Source USA Today, January 27, 2005

3
Is there a Social Security Crisis?

• Social Security Trustees Project if Nothing is
  done, System can pay full benefits until 2041.
• Bi Partisan Congressional Budget Office Projects
  if Nothing is done, System can pay full benefits
  until 2052.

4

• If Nothing is done, System can still pay 72 of
  full benefits from 2052 for the forseeable
  future.
• With Modest Changes, the System will be able to
  pay full benefits for the foreseeable future.

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Social Security An Incredible Success
Characteristics of Social Security

• Retirement Benefits for as long as you live

• Guaranteed, predictable retirement benefits

• Disability and survivor benefits

• Annual cost-of-living adjustments

• Low administrative costs

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Social Security An Incredible Success
Social Security Facts

• Single largest source of retirement income

• One in five adults in the U.S. receive Social
  Security
• benefits

• 30 of Social Security beneficiaries receive
• disability or survivor benefits

• Two-thirds of seniors are dependent on Social
• Security benefits for half or more of their
  income

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Social Security An Incredible Success
Social Security Facts

• 48 million people receive Social Security
  benefits
• every month

• 12 million, or one-half, of seniors would be
  living in
• poverty without Social Security

• 55 of women aged 65 or older would live
• in poverty without Social Security

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Social Security An Incredible Success
Social Security Three Types of Protection
One Third of All Beneficiaries are Non-Retirees
8.2 million people
6.7 million people
33.1 million people
SOCIAL SECURITY BENEFICIARIES Source Social
Security Administration, December 2004
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Social Security Privatization IS The Crisis
Worsens Social Security shortfall
X
Takes 5 trillion from Trust Fund in first 20
years, more in future decades
X
Slashes benefits by nearly 50
X
10
Social Security Long Term Challenge, Not A Crisis
Projected Social Security Shortfall Cost of
Tax Cuts for Wealthy
3.0 tril Tax Cuts for Top 1
Source Center on Budget and Policy Priorities
11
Social Security Privatization IS The Crisis
Benefit Cut Bush Plan
Source Social Security Administration, Office of
the Chief Actuary, Estimates of Financial
Effects for Three Models Developed by the
Presidents Commissions to Strengthen Social
Security, January 31, 2002
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Social Security Privatization IS The Crisis
Monthly Benefit Cuts Under Bush Plan
Source Office of the Chief Actuary, Social
Security Administration, 2001
13
Social Security Privatization IS The Crisis
Monthly Benefit Cuts Under Bush Plan
Source Office of the Chief Actuary, Social
Security Administration, 2001
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Social Security Privatization IS The Crisis
Monthly Benefit Cuts Under Bush Plan
Source Office of the Chief Actuary, Social
Security Administration, 2001
15
Benefit Cuts Under Bush Plan
Privatization 152,000 Benefit Cut
A 20 year-old today who lives for 20 years after
retirement would lose a total of 152,000 in
benefits
16
Risky Nature of Private Accounts
Tom
Jane
Tom and Jane are both employed from age 20-65.
Both earn the same wage and receive a 2 raise
each year, and both deposit the same amount into
their private accounts. Both experience one year
of a Bear market (40 loss) and one year of a
Bull market (40 gain). But Janes Bear Market is
the first year and Toms is the last year.
RETIREMENT Toms pension will be 46 less than
Janes
Source Henry Aaron at Brookings Institute
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Risky Nature of Private Accounts
Privatization Tax
You dont get to keep your full guaranteed Social
Security benefit AND the private account.
X
There is a tax on your private account that is
paid out of your remaining Social Security
Benefits.
X
This tax could amount to 70 or more of the
amount of your Private Account.
X
Privatization Tax is on top of the benefit cuts
that will affect all Social Security
beneficiaries
X
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Risky Nature of Private Accounts
Future Retirees Would Be Better Off If We
Did Nothing Rather Than Privatization
(Average Annual Benefit for Median Wage Earner
Born in 1990s, Retiring at 65)
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SOCIAL SECURITY A PROMISE FOR ALL GENERATIONS