SOCIAL SECURITY DISCUSSION IS ONE WORTH HAVING

A column by Representative Marsha Blackburn for publication and
quotation\
March 25, 2005

Right now in Washington, both Democrats and Republicans are staking out
positions on Social Security. And Americans are hearing conflicting
facts on what exactly will happen to the program over the next ten to
twenty years.

Some believe this topic is too hot to even discuss, but I believe this
is an opportunity to talk openly and honestly about the kind of
supplemental retirement system we want to leave our children.

Here are four indisputable facts that we should all be able to agree on
regardless of party affiliation or ideology:

In 1950 there were more than 16 workers paying into Social Security for
every retiree. Today there are only three workers per retiree. By the
time my two children in their mid-20s retire, there will be only two
workers for each retiree.

We have 13 years until 2018, when the Social Security system will begin
taking in less money than it pays out to retirees. If the program is
left unchanged, that is the year Social Security will begin calling in
its IOUs \-- the loans of surplus Social Security funds the program has
made to the federal government. Both Democratic and Republican
administrations have used these funds over the past decades.

Since Social Security was created in the 1930s, the federal government
has raised payroll taxes \-- the source of funding for Social Security
\-- 20 times. The payroll tax currently consumes \$1 out of every \$8
earned. It has risen from the original payroll tax of 2 percent of
income to today\'s 12.4 percent of income. And each time the tax is
raised, America\'s economic growth is negatively impacted.

Clearly, there is little room to raise funds for Social Security through
higher payroll taxes, even if we chose that route and its dire
implications for family budgets and for our economy as a whole.

According to the Government Accountability Office (GAO), the federal
government has made \$44 trillion in unfunded promises over the next 75
years. To put this in perspective, all taxes raised by the federal
government in our country\'s history amount to only \$38 trillion. The
largest portion of the \$44 trillion is dedicated to Social Security,
Medicare and Medicaid spending, and results largely from the
demographics of an aging society.

To keep up with these spending promises, we would have to double both
the payroll tax and income taxes. The tax burden would consume almost 40
percent of our gross domestic product. No one \-- Democrat or Republican
\-- should ever want to see a tax code that consumes this much of our
hard work.

To most people this sounds like a hopeless situation. It would be easy
to ignore this problem or crisis \-- whichever term you prefer \-- and
leave it to our children and grandchildren to solve. But I don\'t
believe most Americans who are armed with knowledge of these facts think
we should do nothing.

I favor personal accounts as part of the Social Security system. But I
believe any reform package absolutely must stabilize the traditional
Social Security system. We can and should pass a reform package that
preserves benefits and incorporates some sort of personal account
program. Only an innovative solution will provide the funding necessary
to allow Social Security to survive and continue keeping its promises to
retirees.

Each side must come to the table. A few weeks ago Senate Minority Leader
Harry Reid of Nevada said Democrats won\'t negotiate until \"the
President takes privatization off the board, period.\" Privatization of
the system and abandonment of the traditional Social Security system
have not been on the table, but the introduction of personalized
accounts should be a part of the discussion.

Those opposed to reform should approach personal accounts with an open
mind. All of us want to preserve a stable, strong and continuing
supplemental retirement system \-- our Social Security program.

If a mistake has been made in pitching Social Security reform to the
American people, it\'s been an overemphasis on the personal accounts
portion of the overall aim for shoring up the program. Personal accounts
are just one portion of what must be a comprehensive reform. Given the
challenges facing the system, there can be no minor patches.

The President deserves credit for starting this discussion, and I hope
all Americans will join him in working toward a stronger Social Security
system.