President to Push for Reform of US Pension System Before US Congress



Well before President Bush delivers his State of the Union Address, the issue likely to be the biggest political battle of his second term is already the subject of heated debate: his proposal to reform the 70-year-old U.S. pension system called social security. Opponents of the president's plan for the social security system say it could plunge millions of Americans who are dependent on the program into economic difficulty or poverty. Supporters insist the retirement program needs emergency help now to survive in the future.

Social Security, the two words alone provide a description of a program originally intended to help Americans struggling to recover in the years after the 1929 depression, the nation's worst economic crisis.

Often cited as one of the greatest achievements of American government, social security was part of President Franklin Roosevelt's "new deal" package of economic stimulus policies.

It established a system of old-age pensions, survivor's benefits and help for the disabled, providing an economic safety net for the elderly, a barrier against poverty.

Today, 48 million Americans receive social security benefits. With private savings and other investment, it provides a majority of the income for two thirds of elderly Americans, and is especially critical for elderly African Americans and Hispanics.

Financed chiefly by automatic wage deductions, the social security fund grew over the years, and it was thought, could never be in danger of running out of money. But as birth rates slowed and the number of elderly Americans grows, it has become apparent that the system will eventually go bankrupt.

In 1983, Congress tried to buy more time, and adjusted social security. It raised the retirement age, and increased the percentage of social security taxes taken from paychecks. Today, projections of when the system will begin having trouble paying out benefits it promised focus on the year 2042 or later.

As he begins his second term, President Bush wants Congress to pass legislation that would partially privatize the system by allowing Americans to set up personal investment accounts with money that would have gone into the social security fund: "If you're 20 years old and you are in your mid-20s and beginning to work, I want you to think about a social security system that will be flat bust, bankrupt unless the U.S. Congress has got the willingness to act now," he said.

A scary scenario, but one heard before from, among others, former President Bill Clinton in 1998: "If you don't do anything, one of two things will happen. Either it will go broke and you won't ever get it (payments), or if we wait too long to fix it the burden on society of taking our generation's social security obligations will lower your income and lower your ability to take care of your children," Mr. Clinton said.

With social security reform now at the top of the agenda of a Republican-controlled Congress, supporters and opponents agree the system does face a long-term deficit.

But critics accuse President Bush and Republicans of using scare tactics, and point out that social security still has 40 to 50 years during which it will be able to pay almost all benefits. Ken Afpel is a former social security commissioner: "Privatization only leads most likely to drastic cuts in promised benefits to younger workers, as well as an erosion in the financing system of social security which could put the benefits of current workers at risk over time. Let's solve a manageable problem, not create a much bigger one," he said.

Henry Aaron of the Brookings Institution makes this point about privatization: "We have social security for one simple reason, to assure basic income. And assure means something. It means the income will be available for sure and not for maybe, not if the stock market is up, not if inflation is low, in all circumstances. By their very nature, private accounts face financial market risks, that are antithetical (opposed) to the fundamental purpose of social security, of assuring basic income," he said.

But supporters counter by pointing to social security systems in other countries, such as Sweden, Britain, Australia, and Chile, and changes there that have included privately-invested accounts.

President Bush has strong support from some key Republicans in Congress, including Senator Rick Santorum: "I understand why taking on a tough issue such as social security is something that you would rather just pass on to the next Congress or the next generation. But that is not the responsible thing to do," said Mr Santorum..

But some moderate Republicans in Congress are skeptical, and this poses a problem as the president tries to build momentum.

One Republican lawmaker, Congressman Bill Thomas who chairs the powerful House Ways and Means Committee, would broaden the scope of reform, with such proposals as a new tax to make up for shortfalls, and adjusting social security according to gender to account for changes such as more women working and greater pay equality: "If we're talking about limited resources, and expanding needs, maybe there ought to be a discussion about prioritizing who gets what, when and how, beyond the narrow pieces inside the social security box," he said.

Women's advocacy groups are especially cautious regarding any moves they fear would put women at a disadvantage. Joan Entmacher is with the National Women's Law Center: "Privatizing social security would be particularly hazardous for women because of the special role that social security plays in women's lives," he said.

Maya Rockeymore, with the Congressional Black Caucus Foundation, says privatization would be a blow to African-Americans and others who depend on social security. "African-Americans, Hispanics and young people have been the target of a campaign of misinformation from those who claim they can earn great levels of wealth by diverting money from the social security trust fund to create these individual accounts that can be invested on Wall Street," she said.

Among other groups, the nation's largest trade confederation, the AFL-CIO has launched a large public relations campaign against President Bush's social security reform plan.

But Mr. Bush says he plans to travel around the country to promote his plan, and he is certain to devote a good part of his State of the Union Address to it.

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continuesi
Ayesha Tanzeem
November 25, 2015 10:46 PM
One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continues

One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs