- The Washington Times - Wednesday, March 15, 2000

Social Security cannot survive without a major overhaul. According to the latest Trustees Report, in 2014 the program will begin paying out more than it collects in tax revenue.
By 2034, the Social Security Trust Fund will be empty. Of course, this insolvency date assumes the trillions of dollars owed it will be repaid, which is questionable.
Those who think a little tinkering will keep Social Security going are wrong. To keep Social Security solvent for the next 75 years will require raising the payroll tax rate from the current 12.4 percent to almost 19 percent (a 53 percent increase), cutting benefits by at least one-third, or some combination of the two.
The good news is that numerous bipartisan plans have been introduced in Congress that would save and improve Social Security by allowing younger workers to privately invest some of their payroll taxes in Personal Retirement Accounts (PRAs). President Clinton surely understands the serious trouble Social Security is in. Unfortunately, his reform plan falls far short.
The heart of his proposal calls for adding trillions of dollars in additional IOUs to the Social Security Trust Fund. This would guarantee that future taxpayers will face an even larger burden to keep the program going. While refusing to allow workers to create PRAs, the president wants the government to invest part of the Social Security surplus in the stock market. He also proposes new IRA-like accounts for low- and middle-income workers, a new entitlement that would add to the government's financial problems when the surpluses disappear. So much for reform. Instead of playing political games, Washington needs to recognize that Social Security needs to be restructured. United Seniors Association proposes the following:
(1) Stop raiding Social Security. For decades the federal government has been diverting the Social Security surplus to other programs. This would be bad enough if Social Security faced no financial doomsday. Given the current circumstances, it is unconscionable. Social Security surpluses should be off-limits to the big spenders in Washington. The best use of Social Security surpluses is to finance the transition to a fully funded retirement system. Surpluses should be rebated into PRAs owned and controlled by workers.
(2) Keep the promises. The federal government must guarantee all benefits promised to current beneficiaries and those nearing retirement. Promises made should be promises kept.
To drive home this critical point, reformers must reassure seniors that redesigning Social Security won't affect them one penny. It is, rather, their children's future that is at stake.
(3) Create Personal Retirement Accounts. Creating PRAs is the cornerstone of reform. They will allow younger wage earners to create real retirement security through the accumulation of wealth over their working lifetimes. PRAs should be backed up by a federal safety net.
If forced to remain in the current system, the children and grandchildren of today's retirees face dim prospects for their own retirement years. To make reform successful, workers should be allowed to divert at least 5 percentage points of their payroll taxes to their accounts. Lesser amounts, while welcome as a starting point, will not generate the retirement income that workers need and deserve.
(4) No tax increases. Saving the existing Social Security program or paying for the transition to an improved retirement system must be accomplished without tax increases.
If revenue is needed to help finance the transition to a new system of PRAs, Congress should use the budget surplus, which is projected to be more than $3 trillion over the next 10 years.
(5) No government investing of funds. The federal government should not, under any circumstances, be allowed to invest workers' retirement funds, nor should the government determine how workers invest their funds. Government regulation is needed only to ensure safety and soundness. Social Security needs to be fixed now. The sooner the politicians act, the better.

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