Friday, June 01, 2007

 

Group Agrees, Fixing Social Security Means Some Will Get Short-Changed

Personal accounts are not the answer to fixing Social Security but other changes and program cuts are going to be necessary for the program to last past the retirement of baby boomers.

At least, that was the perspective of most participants at a public issues forum hosted by University of Missouri Extension. The forum was aimed at deliberating Social Security, whether or not it needs to be fixed and some possible ways to fix it.

“We had a diverse group of attendees who considered three different approaches to dealing with or fixing social security,” said David Burton, civic communication specialist with University of Missouri Extension and moderator of the forum.

According to Burton, participants (even those approaching retirement) agreed with reducing Social Security benefits by eliminating the $250 funeral benefit, slowing annual “cost-of-living increases, removing the $90,000 ceiling on payroll taxes, setting up a national commission to develop a list of long-term options, lowering benefits for middle- and upper-income retirees, requiring Americans to work longer before becoming eligible for Social Security benefits and reducing the number of non-retirement related programs Social Security funds.

“The group also thought that for the long-term health of the program, the nation needs to revisit the purpose of Social Security. President Roosevelt said it should be one leg of a three-legged stool (pension, savings and Social Security) instead of what it has become – the only source of retirement for many,” said Burton.

The first approach deliberated dealt with reinventing the program with personal accounts, something proposed by both President Clinton and current President Bush.

“Overall, the group was opposed to this approach. Too many questions and concerns, the greatest of which was serious doubt that a majority of Americans would be responsible enough to manage personal accounts,” said Burton.

While some attendees said they would benefit personally, this was not seen as a way to solve the financial problems of Social Security itself.

In the post-meeting survey, 100 percent of participants disagreed with this statement: “People will get far better returns on their Social Security contributions if they control how their money is invested.”

Approach two of the deliberation emphasized that Social Security is a promise made to working Americans and to retires, and it is a promise that must be kept.

“The group agreed that Social Security is a promise that needs to be kept. However, no one thought the promise could be kept or maintained at its current level,” said Burton.

At this forum there was widespread agreement that benefits should be reduced (eliminate $250 funeral benefit), annual increases should be slowed, the $90,000 ceiling on payroll taxes should be removed and a national commission should be formed to develop a list of options.

In the post meeting survey, 90 percent of participants agreed with this statement: “We need to make drastic changes to save Social Security from bankruptcy.” Sixty percent of participants agreed with this statement: “We should scale back Social Security to encourage people to take more responsibility for their financial future.”

Revising Social Security for a new generation was considered in approach number three.

“It was interesting, even though the group was mostly older, they agreed that reform is needed in order for the program to continue,” said Burton.

Part of the reform embraced at this forum was addressing the fact that Social Security has been expanded beyond its original intent and is no longer just one leg of a three-legged retirement stool (pension, social security and savings). For many, it is the only leg.

“Participants felt like we need to begin the process of rewriting Social Security now but not implement new rules on people who are age 55 or older. It may seem unfair, but the younger generation will bare the blunt of most Social Security changes,” said Burton.

In the post meeting survey, 80 percent of participants agreed with this statement: “We should slightly reduce Social Security benefits for middle- and upper-income retirees to guarantee benefits for those who need them most.”

“What attendees at this meeting said loud and clear is that Social Security needs an overhaul that ignores partisan politics and instead focuses on making sure the program remains solvent into the future without increasing the burden on payroll taxes,” said Burton.
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