CONGRESSWOMAN BARBARA LEE CRITICIZES HOUSE BUSH COMMISSION REPORT ON PRIVATIZING SOCIAL SECURITY
Washington, DC - In anticipation of the Bush Commission on Social Security recommending the privatization of Social
Security, Congresswoman Barbara Lee today voice her strong disapproval of any attempt to privatize the program.
Approximately 45 million Americans receive Social Security
benefits. Over 4 million are residents of California. Social Security
is
the principal source of retirement income for two thirds of elderly
Americans, representing 90% of the annual income for 29% of
all seniors over the age of 65.
"Now that the Bush Administration has passed a $1.6 trillion tax
cut that primarily benefits the wealthy, they need to find other
methods of paying for Social Security due to the lost revenue, but the proposal to privatize Social Security does absolutely
nothing to extend the life of the program or save it," said Lee. "For
millions of Americans Social security is the only protection
against the shackles of low lifetime earnings, the financial hardships
related to death or disability, the danger of poverty in old
age, and the uncertainty of inflation. Privatization undermines these
protections and adds one more risk that workers would have
to worry about – individual financial risk."
Under privatization, Social Security benefits would no longer be
determined primarily by a worker’s earnings and the payroll tax
contributions made over the span of a career. Benefit levels would
instead be determined by the whim of the stock market and
by the timing of his or her decision to retire.
"Between March 2000 and April of this year, the S & P 500 fell
by 28%. If Social Security had been privatized, retiring workers
who had their individual account invested in a fund that mirrored the S
& P 500 would have 28% less to live on for the remainder of their
lives," said Lee. "Social Security provides guaranteed, life-long
benefits. No matter what the stock market does the day
you retire or in the months leading to up to your retirement, your
benefits would be unaffected."
Congresswoman Lee concluded by pointing out that young workers would also be negatively affected by privatizing Social
Security. According to Social Security experts, if 2% of the current
12.4% payroll tax were diverted into individual retirement
accounts, Social Security benefits would have to be cut by 54% for workers aged 30 and younger by 2002 in order to restore
Social Security’s long-term solvency.
"The Congress has an obligation to strengthen Social Security,"
said Lee. "It is the most sacred and fundamental safety net for
all Americans."
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