- The Washington Times - Thursday, August 15, 2002

The U.S. Social Security system is facing a financial crisis of epic proportions. Declining birthrates, the aging "Baby Boom" generation and increased life expectancy will produce a funding shortfall that will eventually bankrupt the program.
You don't have to be a statistician to see the writing on the wall.
There are fewer workers supporting more and more retirees every year, and under current projections, total benefits being paid out will exceed Social Security revenue by the year 2014. It's all down hill after that.
African-Americans will be hurt the most. Under the current system, 70 percent of African Americans can expect to receive less money from Social Security than pay in Social Security taxes and a significant number of black workers will never see a penny from the program, because blacks, on average, die younger than others.
Yet Social Security is still important to aging African-Americans, many of whom have no other form of retirement income. So it is important to put the program back on a firm financial footing and equally important to level the playing field for blacks.
Even in these troubling economic times, anybody with an ounce of common sense knows the best way to do that is by moving toward a system based on private investment and personal ownership. Such a system would give Americans the option to invest a portion of their payroll taxes in pension accounts that will better ensure their financial future.
Under the current system, a young worker paying into the Social Security program has no guarantee he or she will ever receive any benefits at all. Yet, a 28-year-old worker making $13,500 per year and paying $1,674 in Social Security taxes could accrue $177,147 by age 67 if that $1,674 per year was invested in a conservative investment account that earned just a 4 percent return, according to a 2001 study. That would amount to $400 more per month than the Social Security system promises today a figure that cannot be ignored.
Under the current system, the government prevents workers from deriving these benefits. Instead our Social Security taxes are used to fund other government programs, while the taxes we pay are replaced in the Social Security "trust fund" by government IOUs.
Critics of Social Security reform typically suggest that privatizing the program is too risky, and that workers who invest unwisely will not be guaranteed a secure retirement. Many point to the Enron collapse, and buttress their argument with stories of people who lost thousands in the wake of the corporate giant's demise.
As the National Committee to Preserve Social Security and Medicare a group that opposes Social Security reform has pointed out "Social Security is the mainstay of retirement for people of color." "Without Social Security," the group notes, "the poverty rate for elderly African Americans would increase from 24 percent to 65 percent."
In light of such statistics, it is crucially important to fix the system, and strengthen it in a way that provides a better deal for African-Americans.
The current system is especially unfair for young black males, who typically enter the work force earlier, enroll in college at significantly lower rates, and have a lower life expectancy than other American workers.
Since they pay into the system longer, and live an average of three years less than other American males, many African American men receive far fewer benefits than their peers. Indeed, the National Center for Health Statistics reports that half of all 20-year-old African American males who enter the labor force will die before they receive even three years of Social Security benefits.
Updating Social Security by adding a private pension option would give workers ownership of the money they pay into the system, a method that promotes wealth accumulation and contributes to economic growth. If an individual dies young, his or her accumulated wealth and savings from the private account could be left to the family and not simply lost in the black hole that exists today.
By investing in our future, we can strengthen the social contract between government and worker, and create a more evenhanded system for African-Americans and other minorities.

Alvin Williams is president and CEO of Black America's Political Action Committee (BAMPAC), a nonpartisan federal PAC that supports African-American candidates for public office.

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