In his January 20 State of the Union, President Bush repeated his call for desperately needed Social Security reform: “Younger workers should have the opportunity to build a nest egg by saving part of their Social Security taxes in a personal retirement account. We should make the Social Security system a source of ownership for the American people.”
“What we’re for is giving younger workers control over their Social Security contributions,” said Ryan Ellis, executive director of SocialSecurityChoice.org. Ellis’ group does not push one particular plan over any other. “We’re in favor of personal retirement accounts and giving as much control to individual workers as possible,” he said.
“Social Security Choice is common sense. It’s allowing you to decide how you want to invest your Social Security taxes,” says the group. “Current retirees and those nearing retirement should be guaranteed every penny of their promised Social Security benefits. They paid for their benefits and they should receive them. But younger workers should be given the choice of investing their Social Security taxes in individual retirement accounts. They could invest in stocks, corporate bonds, government bonds, money market funds, and annuities.”
Not only would personal retirement accounts (PRAs) with money invested in markets solve Social Security’s insolvency problem–i.e., catastrophic bankruptcy within 30 years–but turn an entitlement into property. Currently, no one “owns” his Social Security benefits, and children cannot inherit any leftover money. Benefits can be cut or eliminated at the whim of Congress. But funds in PRAs would actually belong to American workers. “With Social Security choice you own your retirement assets and no politician can touch them,” says SSC. “You are building an estate that you can leave to your family or to charity.”
“In late 2001,” said Ellis, “the President’s commission on Social Security reform issued a plan with three choices. Since then, we haven’t heard that much. We want to highlight Social Security choice as a national issue. Congress is not going to move on this by itself. The country is not going to move on this by itself. It takes presidential leadership.”
Despite Bush’s mention of Social Security reform in his address, Ellis does not believe that Washington leaders have made reform a priority this year. “All the indications are that Congress won’t do anything controversial this year,” he said. “We’re hoping for 2005.” But the window of opportunity will be open for only so long. “If we’re around five years from now,” Ellis said, “we’ll consider this an abject failure. We plan to disband.”
If politicians drag their feet too long, there will not be enough time for Americans to invest their PRAs and make enough return to cover Social Security’s looming multi-trillion-dollar deficit. In a March 19, 2002, speech called “Social Security and African-Americans” posted on SSC’s website, Ohio Secretary of State J. Kenneth Blackwell talked about an aspect of Social Security that, for some reason, does not seem to annoy progressives who are quick to find racism everywhere else: “[A]s a black man, Social Security tells me I will live only another 13 years and receive benefits for the last two. Yes, lower life expectancies for blacks and lower-income Americans do offset what is supposed to be Social Security’s progressive benefit structure.” PRAs could solve that problem, too.
Blackwell emphasized the importance of alacrity. “The question is not whether Social Security will fail. It will and people know it. Two to one, young Americans–as has been mentioned–like my three children, expect to see a UFO before they see a benefit check, and at this rate, they will. If we reform Social Security now, the system will still have enough money to pay benefits during a transition. Very shortly we lose that luxury.”
Ellis asserted that the important thing is to get PRAs off the ground, even if they grant only limited control over a small portion of Social Security taxes. “Once the camel’s nose is inside the tent, once people get the taste, they’re going to want more,” he said.
Ellis works for Social Security reform inside the Beltway while SSC President Robert Costello tries to whip up support for it around the country. “We’re planning town halls with Rep. John Shadegg [R.-Ariz.] and Rep. Jeff Flake [R.-Ariz.]. We’re trying to arrange one in South Carolina,” said Ellis.
Though conservatives may find this unfortunate, abolishing Social Security is not a live option, said Ellis. “You can’t simply blow it up. We’re working for giving people choice within Social Security,” he said.
Social Security Choice.org may be reached at 10 G St. N.E., Suite 410, Washington, D.C. 20002 (202-379-3012; fax: 202-789-7349, e-mail: info@SocialSecurityChoice.org; website: www.socialsecuritychoice.org)