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Guest Commentary April 27, 2002
Congress Should Debate Social Security Privatization
The Honorable Jon Corzine
Last December, President Bush's Social Security Commission prepared privatization plans that call for deep cuts in Social Security benefits. In fact, it talks about taking $1 trillion out of the Social Security trust fund for transitionary costs to a privatization program.
Under these proposals that are on the table, some of the cuts in Social Security may be as much as 25 percent for those who will be retiring in about 20 years and could be as much as 45 percent for later retirees.
Think about that: 25 percent to 45 percent. The average Social Security benefit for an American is $10,000. We ought to put that in context. If we are going to take 25 percent, or $2,500, away from that $10,000 or, God forbid, the 45 percent, or a $4,500 cut, and apply it to the $10,000, one wonders how our seniors are going to meet their financial obligations with this poor social safety net.
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Ten thousand dollars is not lavish, but the idea of a $5,500 benefit seems pretty scary in a world where one can spend that much on prescription drugs in a given year, before even paying for rent and other needs. ... Nobody is going to be living high on the hog on $10,000, and certainly not $5,500. ...
I know a lot of people believe we have to fight these cuts, and we probably will over the long run, because most people think they are just wrong. But we also need to make sure Social Security has the resources to maintain the benefits structure that is in place. The entire Social Security shortfall, according to the Social Security actuaries -- that is the administration itself -- is $3.7 trillion over the 75-year measured period. That may sound like a lot of money, and I guess it is.
I sit at Everett Dirksen's old desk, and he used to say: A billion here, a billion there is a lot of money. Three point seven trillion is a lot more money, but it is not a lot in the long-term fiscal potential of our Nation. In fact, last year's tax cuts alone will cost the Nation, over that 75-year period, $8.7 trillion. So we have $3.7 trillion to secure Social Security, and there is an $8.7 trillion tax cut. We can put those two together and say: Where are our priorities? What should we be emphasizing?
The Social Security shortfall is less than a half of the cost of last year's tax cut. Some tax cut was very good, and most of us would argue that is very much the case. It is just a matter of whether it is overreaching and whether it is, in the context of today's world, something we should continue to pursue.
Like most Democrats, I am fully committed to protecting and defending Social Security. This is an issue that deserves full and complete debate. Unfortunately, a number of folks, for political strategy reasons -- particularly the leaders in the House and also President Bush, I suspect -- have been trying to push this issue to the back burner. I do not think we can do that in this context of the deteriorating fiscal health of the Nation. We need to have this debate about the future of Social Security in front of the elections this year so that the American people can express their points of view.
Interestingly, the chairman of the Republican National Committee just this week, Gov. Mark Racicot, said Congress should debate Social Security privatization this year. I embrace that statement and think he is right. As a matter of fact, Mr. Levin, the distinguished Senator from Michigan, and I have sent a letter commending Governor Racicot for making his statement and encouraging that debate.
Social Security is going to impact every American -- those retired today but, more importantly, those who will be retiring in the future. ...
I do not think they are aware of the nature of some of the recommendations that have come out of the Commission, so-called "Save Social Security," that President Bush put together and came up with its report that would lead to 25% to 45% cuts in Social Security benefits. ...
As we go deeper and deeper in debt, and as we erode that $5.6 trillion that was the basis of how we made our judgments over the last 18 months, and certainly with regard to that tax cut, we need to understand that the world is different today, and it is particularly different as to how we are going to fund and secure Social Security in the months, years, and decades ahead. I, for one, think we need to get on with that debate, a fair debate, because it is important for the American people to participate in that process.
Jon Corzine, a Democrat, is a U.S. Senator from New Jersey. The above column has been adapted from a speech Sen. Corzine delivered on the floor of the Senate, April 26, 2002. To contact him, Click Here.
The above column has been distributed by PoliticsOL.com.
