Tomorrow, Social Security–a bedrock promise Americans have earned with a lifetime of hard work–turns 75. In 2005, President George W. Bush and Congressional Republicans pushed cuts and a risky Social Security privatization scheme. Democrats and the American people said ‘no.’ If Republicans had succeeded, seniors would have lost trillions more in the stock market meltdown of the Bush recession. Instead, no one lost a penny in Social Security. Despite this history, Republicans are once again promising to privatize and cut Social Security–turning it over to Wall Street. Democrats are once again saying ‘no.’
Speaker Pelosi on tomorrow’s anniversary:
For 75 years, Social Security has represented a bedrock promise to the American people: that after a lifetime of work, this country would ensure a measure of protection for our seniors, now and in generations to come. What started as a cornerstone of the New Deal has become an unbreakable bond in our nation's social contract. It is a source of stability for millions of hard-working Americans — through survivor benefits and assistance to seniors and people with disabilities. And we will continue to uphold our pledge of Social Security long into the future.
Just five years ago, President Bush and Congressional Republicans put forth a risky plan to privatize and cut Social Security — turning it over to the whims of Wall Street. At the time, Democrats and America's seniors said 'no.' We would not turn a guaranteed benefit into a guaranteed gamble. As they saw their retirement investments and home values tumble in the Bush recession, seniors knew they could count on Social Security.
Today, Republicans would chart a course right back to the same failed ideas of the past, putting Social Security at risk. Again, we're saying 'no.' We are not going back to the 'exact same agenda' of the Bush years. Seventy-five years after Social Security's enactment, we will keep moving forward, strengthening this vital initiative, and never wavering from our promise to America's seniors.
As Social Security turns 75, what you need to know:
SOCIAL SECURITY PROVIDES GUARANTEED BENEFITS TO AMERICA'S SENIORS & FAMILIES EARNED AFTER A LIFETIME OF HARD WORK
Social Security helps all Americans:
53 million Americans receive Social Security benefits, including more than 90 of America's seniors.
1 in 3 beneficiaries is not a senior citizen, but instead a surviving spouse or child of a deceased breadwinner, a dependent spouse or child, or a person with disabilities.
About 6.5 million children under 18 – nearly 9 percent of all U.S. children — received part of their family income from Social Security in 2005.
Social Security's benefits are essential to American's economic security:
Six in ten seniors rely on Social Security for more than half of their income.
The average Social Security benefit for a retiree is $14,000 a year.
The median income for senior households is a mere $24,000 – reflecting just how much Social Security means to most American seniors.
One in three seniors rely on Social Security for more than 90 percent of their income. Among elderly widows and unmarried women, half have little to live on other than Social Security.
Social Security lifted 1.3 million children out of poverty and reduced the depth of poverty for another 1.5 million children.
Social Security provides secure income to workers, their families, and survivors. For a 30 year old, married worker with two children, Social Security provides the equivalent of a life insurance policy worth $476,000 and a disability insurance policy worth about $465,000.
More than one-third of young men and nearly one-third of young women will either become disabled or die before reaching retirement age.
Social Security cannot be matched by private accounts and pensions:
Only half of the workforce has a retirement plan (pension or savings) at work.
Employer-sponsored defined benefit pension plans, which provide a guaranteed monthly income, are quickly being replaced by riskier employee savings plans, which do not.
Social Security has no investment risk and its retirement benefits cannot be outlived, unlike private savings.
Unlike private savings and most pensions, Social Security's purchasing power is protected against inflation.
401(k) and IRAs lost $2.8 trillion (32 percent of their value) in the financial collapse during 2008.
Home equity values, which many believed were reliable as investment income, lost $6.8 trillion since 2006.
SOCIAL SECURITY IS SUSTAINABLE AND AFFORDABLE
Social Security is self financing and does not contribute to the deficit:
Social Security is a self-financed program. It is funded directly by payroll contributions that are used to purchase interest-earning government bonds backed by the full faith and credit of the United States. Any income that is not needed immediately to pay benefits is held in a trust fund that can only be used to pay for Social Security benefits. Social Security cannot borrow funds from any other source.
The trust fund is currently valued at $2.6 trillion, and will grow to $4 trillion before being used as designed to help pay for benefits for the large Baby Boom generation.
The trust fund belongs to the American people. Anyone who says we need to cut benefits to reduce the budget deficit means they want the government to avoid having to pay back the American people who own the bonds in the trust fund. They would never say we should not pay back the government's other creditors.
Social Security can pay full benefits for nearly 30 years and will never “go bankrupt”:
The trust fund is large enough to pay full benefits until 2037, after which payroll contributions will be sufficient to pay about 75 percent of scheduled benefits.
Congress will need to make adjustments to Social Security financing to ensure that benefits can be paid in full after 2037, but this does not necessitate radical changes such as dismantling the structure of Social Security, privatization, benefit cuts, or raising the retirement age.
Social Security is affordable now and in future generations:
Contrary to myths promoted by opponents of Social Security, the cost of the program is a very small share of our national economy. As a proportion of the Gross Domestic Product (GDP), Social Security costs are only 4.9 percent. As Baby Boomers retire, the cost will rise only slightly to 6.2 percent of GDP by 2035, and then drop back down at a stable 5.8 percent of GDP by 2050 and thereafter.