Social Security: Whats New; Whats Not; and, Whats Notch? PART I

This is the first articlein a three-part series on Social Security reform. It is my hope togenerate a debate around Social Security reform that highlights the thoughtsand the will of the residents of the 6th Congressional District.

During the presidentialcampaign and long before our resources took a major detour into the military/internationalarena, the debate around Social Security was at an all time high. Most importantly, terms like- surplus lock box; privatization; and,"Notch babies" became a part of the national jargon. I will takea look at each issue throughout the series.

Bush, the candidate, favored a plan whichallowed workers to elect a partial privatization plan. In May, Bush,the President, appointed a Commission to study Social Security Reformand in December 2001, the Commission released several reform options- eachwith a privatization component. In general, privatizationwould allow workers to divert a part ( or in some cases all) of their socialsecurity contributions away from the system to create private personalinvestment retirement accounts.

In keeping with the partisan nature of theSocial Security reform issue, House Majority Leader Dick Armey has signaledthat he will schedule consideration of HR3135. This measure, introducedby South Carolina's Jim Demint, (and often regarded as the privatizationsong prelude) would guarantee full benefits for current social securityenrollees. This is seen as an attempt to ward off any oppositionfrom those beneficiaries who have already contributed and are receivingSocial Security benefits. However, this move presents a serious challengeto Congress' exclusive right to revise benefits at any time. It couldalso be construed as a legal challenge to the 1960 High Court ruling establishing that Social Security participants accrue no property right to benefits.

Part and parcel to the marketing debatearound Social Security reform is how the privatization of the system willimpact minorities. It has been frequently argued that African-Americanswould benefit from a private account system because the shorter life expectanciesof African Americans lessens the amount of time they have to draw on thesystem and thus reduces the amount of their total benefit from their originalcontribution.

This argument totally ignores the myriad ofbenefits African Americans receive from the Social Security system TODAY-including a progressive benefit, dependable monthly income, disability/survivorbenefits and family insurance. Also, many widow benefits are availableto surviving spouses at age 60. Should the suggested shorter lifeexpectancy actually prove true, the current system provides a safety netfor the surviving beneficiary. And, should the life expectancy argumentfall through- there are over 50,000 constituent beneficiaries over 65 yearson Social Security and over 10,000 receiving

Supplemental Security Income in the 6th CongressionalDistrict- the current system will not fall through. Opponents ofprivatization point out that to contribute income for private investmentsrequires that you reduce your current available income. T'is hardlyrocket science to understand that you cannot use the same funds as bothincome and investment funds. The transition time andcost to the system to implement a private investment component would mandatea reduction in guaranteed benefits and cut deeply into the solvency ofthe existing program. Finally, low-wage workers are more likely tospend greater periods of time outside of the workforce than those highincome workers. As a result, they would be unlikely to accumulatea comparable amount of wealth in a private account.

I repeat, Social Security is the great safetynet for African Americans. Any attempt to reform the system musttake into account the current benefit scheme for Americans who lack boththe time and funds to make a lucrative private scheme feasible. Also,current benefits must be protected: The very features of a private accountsystem compromises guaranteed rewards from a long work life in exchangefor questionable and risky gains in the market.

Congressman Charlie Rangel (D-NY), RankingMember of the House Ways and Means Committee, the legislative body withfinal jurisdiction over the Social Security reform legislation makes acompelling case against privatization and pokes gapping holes in the "shorterlife expectancy" argument. Mr. Rangel asks the question:" Is privatizationreally the best way to address the lower life expectancy of African Americans?"

Just this week, Democratic leaders of boththe House and Senate have announced that they will orchestrate full floordebates on Social Security's future. Under Mr. Rangel's leadership,we, as Democrats, have expressed our earnest concern about the privatizationroute to insure a solvent and thriving system for all retirees. We also recognize that Social Security must move into the 21st centuryin a responsible, reliable and compassionate way. We, as the gatekeepersof social policy, must resist the trendy fads of the moment and initiatereform that will last. There is far too much riding on this publicpolicy initiative to leave it up to the fast and the furious: this is ajob for the tried and tested.

Make no mistake about it: Any one of the currentplans for privatization would be a mathematical and social nightmare. Let's not lose sight of what the plan is and those it is designed to help. This fund provides monthly benefits to workers and their families whenearnings stop or are reduced because the worker retires, dies or becomesdisabled. 1999 statistics cite almost 75,000 beneficiaries in the6th Congressional District, of which 45,000 are retired and in some casesrely solely on this benefit. I don't want the responsibility of havingto tell these folks that their benefit funds were wrapped up in the stockoptions of a failed energy corporation-hint hint.

As I develop my position on the future ofSocial Security and what reform scheme is feasible- if any, I want theinput of my Constituents so we reflect both the times and the traditionof maintaining our quality of life in the golden years.