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July 06th, 2005Students meet with Senator Gordon's staff
July 06th 02:10:01 PM
Our meeting with Senator Gordon Smith's staff in Portland was bittersweet. We were reassured that the Senator is a supporter of personal accounts but he does think all personal account bills will fail in the near future. We learned that the Senator has teamed with Senator Kent Conrad of North Dakota to create a bill which neither introduces personal accounts nor addresses the solvency of social security. His staff suggests that this bill is a "middle of the road" policy but it is actually an attempt to do as little as possible and still look busy. Silver lining on our cloudy visit to Portland has to be a book of Elizabeth Dole's favorite quotes. It was ghost written by Senator Smith's chief of Staff and each of us received a copy at the end of our visit. I read a few pages and found a quote by Shirley Chisholm I'd like to leave with Senator Smith.
"You don't make progress by standing on the sidelines, whimpering and complaining. You make progress by implementing ideas."
You can read the bulleted concepts in the Smith-Conrad plan here:
http://www.startribune.com/stories/1519/5475176.html
Posted by Jonathan Swanson| Comments (0)
July 01st, 2005We need you!
July 01st 02:16:29 PM
Don't be discouraged, we're coming to a town near you. Are middle aged citizens in your community preventing you from taking a stand? We should be tired of putting our faith in the government to fix a system that was invented for a generation so long ago. Get involved today!
This issue affects our generation more than any other. We're paying taxes. Paying into a system that will not promise any returns. Would you honestly invest into this system if you had the choice? This is why as students we should come together, because we can make a difference by creating a voice. We need to organize ourselves and set up more town hall meetings. We need to tell friends of friends and bring our parents and grandparents to these events to convince the unaware. Come one; come all to help set the course for our future. We have the opportunity to make a difference and lead a path for a secure future, a better future.
Posted by Jonathan Swanson| Comments (0)
June 22nd, 2005Bigger than just Social Security
June 22nd 02:19:44 PM
The debate occuring inside the Beltway and all across America over the future of Social Security, is really about something much larger than just Social Security. It is about the fundamental question each and every American must ask themselves: How am I going to ensure that I am financially secure after my working years? For decades, many retirees have depended upon both Social Security and a corporate pension to fund their retirement years. As we enter the 21st century, the likelihood that this route will ensure financial security for America’s seniors is diminishing – quickly.
Not only does Social Security face a funding crisis that will cause our federal deficits to soar in the next few decades, now many corporations are adding to the mounting burden placed upon America’s taxpayers by passing on their pension obligations to the federal government.
Recently, United Airlines went before a bankruptcy in Chicago to seek to hand over more than $6.6 billion dollars of retirement obligations to the federal government. The bankruptcy judge granted their request, and now the pensions of 119,000 current and former union employees of United Airlines will be funded by you and me.
With many corporations overwhelmed by the growing costs of their pension plans, this trend is sure to continue – adding an additional burden to the American taxpayer. Both pension plans and Social Security can be grouped into a broader categorical definition of retirement plans known as defined benefit plans. That is, you pay in a certain amount throughout your working years, and when you retire, you will receive a certain, or defined, amount each month or year. The problem with these plans is that they leave corporations (or in the case of SS, the government) with huge liabilites for years to come. These plans make promises that can’t be kept and both the corporation/government and the retiree are hurt in the long run.
I recent decades there has been a shift towards defined contribution plans, where both the individual and company set aside a defined amount each pay period into an account (usually a diversified mixture of stocks & bonds) where it accumulates over the years and earns a strong return. Examples of these plans are 401(k)s, IRAs, etc. Over the course of one’s career, these accounts will amass hundreds of thousands, if not millions, of dollars, guaranteeing the individual a secure retirement. In addition, the company is left without a liability to pay out after the individual retires.
We have seen the failure of defined benefit plans in both corporate pensions and the Social Security system. Meanwhile, defined contribution plans leave both the employee and corporation in the best position once the individual leaves the company and retires. Additionally, the retiree has a real, tangible asset he/she can pass on to future generations. With the large amount of unfunded liabilities facing Social Security, aren’t private accounts (a defined-contribution plan) the obvious solution?
Posted by Jonathan Swanson| Comments (0)
June 21st, 2005Star Wars vs. Social Security: How to prevent slipping
June 21st 02:18:13 PM
If I was going to ride on the Millennium Falcon I wish I could be sent light years into the future. If I could patent one invention it would be to create a time machine. As we speak our future seems murky and ambiguity lingers.
We have seen all the facts from the Administration and determined that in 2017 Social Security will be exhausted. The debate for a better system has temporarily slowed down in Congress because they are bogged down with the judicial nominations and Appropriations bills.
What the Legislative branch tends to do is take a passive approach towards a crisis when they form. Why don’t we fix this problem way before the situation develops and take a more active approach? As part of the generation that will be most affected by the Social Security debacle we need to be sure that we have elected a strong leadership in Congress, analyzing options and making decisions to better suit the American people.
We don’t want to be in Episode 4 in Star Wars wondering how the dark side became such a powerful force in the galaxy. We instead should be looking to see how we could have prevented it. Anakin Skywalker overnight didn’t decide to turn the Republic into a deranged dictatorship. Star Wars is analogous in the current Social Security debate because we know we should reform Social Security before we’re left and sitting wondering how all this happened.
To help push Congress along in the process of reforming Social Security, as students we need to come together. We have formed a voice and are making a difference. Across the nation students are packing up their surf boards, filling up their cars with gas, and putting on their shades to come to DC and talk with their Congressman. We need to contact everyone and get them on board. Doing nothing puts our fate into the hands of the dark force. Standing up and speaking out can ensure that our generation can have a system that will support our families and uphold the Republic.
Posted by Jonathan Swanson| Comments (0)
June 20th, 2005The AARP of our generation, indeed!
June 20th 02:21:09 PM
Last week, I covered, in detail, why the President’s plan for Social Security reform stands to benefit our generation across-the-board (http://www.secureourfuture.org/blog.php?view=11). It would prevent the need for massive payroll tax increases (which the current system would demand), it would prevent the need for massive income tax increases or deficit spending (since the trust fund would no longer be a problem), and most importantly of all, it would provide each and every single one of us with the choice to invest part of our Social Security tax in the market, allowing us the opportunity to make more money than Social Security could ever stand to pay us.
Unfortunately, the road to reform is littered with bumps, obstacles, and obstructions. Worse yet, one of those obstructions is a group that claims to represent our generation. I speak of no other than Rock the Vote, a supposedly 'nonpartisan' organization that wants to be, according to its own people (http://blog.rockthevote.com/2005/06/its-wrap-rock-vote-awards_13.html), the 'AARP of our generation.' Rock the Vote has taken a staunchly anti-reform stance towards the issue of Social Security- a stance that is baffling, given that it claims to represent our generation, the youth of America.
But perhaps Rock the Vote really does want to be an AARP.
You see, the AARP is a group that claims to represent the senior citizens of America- those who are already on Social Security. The AARP exists solely to make sure that these retirees get as many benefits as possible- it only represents one small portion of our population, the one that is most dependent on entitlement programs. As such, the AARP has staunchly opposed any Social Security reform, demagoguing any changes as 'destroying the system.' Instead, the AARP advocates tax increases on the current workers who pay into Social Security.
Their talking points consist of numerous arguments, one of which is particularly surprising: that investing in the stock market would be like 'gambling at a casino.' This, of course, begs the question as to why the AARP itself offers its own members numerous investment-based retirement programs, and why the AARP itself invests its own funds heavily in the stock market. But I digress- the irrationality of AARP’s chief argument against personal retirement accounts and investing can clearly be seen when one looks at the stock market’s average return over its history, which vastly outperforms Social Security’s return.
The AARP advocating tax increases on other groups because of their own politics is one thing- after all, they must keep the support of senior citizens somehow, and what better way to do it than to try to go on a quest (as disingenuous as it is) to 'save Social Security' from those who are going to 'destroy' it with reform? The AARP is merely doing this as a PR campaign- to benefit themselves politically with their own senior citizens base, and with the Democratic Party, which it often allies itself with on these quests to extend entitlement programs with tax increases. Unfortunately, the AARP’s irrational arguments against Social Security reform don’t stop with the AARP.
No, the AARP has extended its politics, and is now trying to con the youth of America into the worst deal that could possibly be offered to them: opposing Social Security reform in the form of personal accounts, in favor of tax increases instead. Joining the AARP’s bandwagon in this effort is no other than Rock the Vote, the self-proclaimed 'AARP of our generation,' and a group that has closely worked with the AARP itself in the past few months.
The 'AARP of our generation', indeed!
Just today, Rock the Vote’s very own Hans Reimer, its 'expert' on Social Security reform, advocated increasing the payroll tax cap on worker’s incomes (http://blog.rockthevote.com/2005/06/if-i-cant-have-you.html). Proposals such as this have the taxable base extending from the current $90,000 to perhaps $150,000 or $200,000. This is the plan that the AARP often advocates, and it has been, for a while, one of the solutions that Rock the Vote has advocated to solve the Social Security funding problem. In addition to this, Rock the Vote staunchly opposes personal retirement accounts and the choice for American workers to invest part of their Social Security taxes in the stock market.
AARP and Rock the Vote, of course, disregard the fact that any such payroll tax cap increase would do little to solve the system. In fact, studies by the CATO Institute (http://www.cato.org/pub_display.php?pub_id=3780) have shown that even if the entire tax cap was removed entirely- taxing all of the income of every working American- would do nothing more than delay Social Security’s financial problems for eight years. Raising the tax cap to something along the lines of $150,000 would be even more useless- it would only delay Social Security’s problems for three years. After this amount of time, the system would be right back where it is today- in need of more reform, either through tax increases or another proposal. Additionally, such tax increases- especially the tax cap increase to $150,000- would hurt small business owners across the country, damaging their ability to hire employees, grow their businesses, and contribute to the economy.
Worst of all- and perhaps most appalling- is the fact that Rock the Vote staunchly opposes personal retirement accounts and the choice for working Americans to invest. In fact, Rock the Vote’s very own Hans Reimer has stated in the Rock the Vote blog that he would even prefer the current system over President Bush’s reform package (http://blog.rockthevote.com/2005/04/hard-sell-on-benefit-cuts.html)! As we discussed last week, the current system would mandate payroll tax increases, income tax increases, benefit cuts, deficit spending, or even a combination of the four, all without the choice for Americans to invest part of their Social Security taxes. All of this, with a 27% benefit cut in 2041, by the time most Americans in the younger generation start to retire. This is what Rock the Vote supports?
Apparently, it does. Rock the Vote would rather support the current system or ineffective tax increases instead of the President’s proposal for Social Security reform. Polls show that massive majorities of the youth of America- nearly 70%- want and support the President’s call for personal retirement accounts. Why, then, is Rock the Vote- the organization that claims to represent that very youth- opposing what seven out of ten young Americans want? Why is it taking the views of the AARP, which represents the polar opposite of the youth of America, and giving it precedence over what our generation really wants?
The answer is simple: Rock the Vote has decided to take its 'become the AARP of our generation' goal literally, and has chosen to become the AARP itself. Such an organization is not worthy of the support of the youth of America, until it truly starts to take the wishes, needs, and beliefs of that very youth of America into account. It is time for Rock the Vote to either drop the 'nonpartisan' label, and drop the 'representing the youth of America' label, unless it addresses the needs of the youth over its own blatant partisanship.
-Sunny Sidhu
Posted by Jonathan Swanson| Comments (0)
June 15th, 2005The cost of waiting
June 15th 02:23:49 PM
While Democrats (and some Republicans!) engage in a game of brinksmanship over solutions to the Social Security crisis, it is my generation that pays the price. Each day we ignore the Social Security crisis is a day we lose an opportunity to lessen the burden on young people. While politicians focus on the difficulties financing various reform plans, they continue to waste dollars by squandering one of our biggest assets: time.
The quicker reform legislation is passed, the more time my generation has to begin making up the short falls of the current system. The faster we have personal accounts, the faster Congress can be halted from spending the trust fund dollars that should be protected for future retirees.
In the not too distant past, a young representative from Tennessee named Harold Ford showed Americans that his mind was open to personal accounts, acknowledging the shortfalls of the current system. He said: "the existing system, which prevents poverty...does not allow low- and middle-income workers to build assets and create wealth."
http://www.house.gov/apps/list/press/tn09_ford/20030916socialsecurity.html
While Rep. Ford was cautious about the transition cost of particular plans, his openness to personal accounts as a workable model for the creation of wealth represents an ability to reach across the aisle and work with both parties to find a solution that is in the best interests of all Americans.
I applaud Rep. Ford for this courage and call upon him and other open-minded Democrats to show, not that they will simply succumb to the will of the current Administration, but to show openness to the idea of personal accounts and the willingness to come to the negotiating table. They owe it to their constituents, particularly those of my generation, to acknowledge that a problem exists and that Congress needs to collaborate on a solution as soon as possible. The longer we wait, the greater the burden.
-Patrick Wetherille
Posted by Jonathan Swanson| Comments (0)
June 10th, 2005Social Security reform is an opportunity
June 10th 02:41:24 PM
Perhaps the most pressing financial issue for the future of our generation is that of ballooning entitlement programs; programs like Social Security, which rely on growing populations to keep them on strong financial footing. Unfortunately, due to the upcoming retirement of the baby boomer generation, that financial footing is being threatened, as there will be so many retirees that there simply will not be enough workers in the workforce to fund all of their Social Security benefits. That, of course, has set up a situation in which our generation- the next set of workers in America- are going to be forced to pay for this financial problem.
Under current estimates, Social Security will begin to pay out more in benefits than it receives in taxes in 2008; the system will then have to tap into the "Social Security trust fund" in 2017, which will contain approximately $5 trillion in government bonds. In order to keep paying the benefits it promises, Social Security will have to cash all of these bonds in from 2017-2041; because the government is going to have to cash its own bonds in, it will have to find the money to pay off the $5 trillion, which will require one- or a mix- of three things: higher taxes on all of us, deficit spending, or benefit cuts. After 2041, the situation becomes even worse, as the trust fund will be empty. This will mandate about a 27% benefit cut- across the board- for every single retiree at this point. Conveniently, this is around the same time every member of our generation will be retiring.
The conclusion? Under the current system, our generation will have had to pay higher taxes or will have had to deal with huge deficit problems from 2017-2041, while also having a 27% benefit cut when we retire. Are higher taxes and smaller benefits a fair deal? Absolutely not.
This, of course, is exactly why the issue of Social Security reform is so important for our generation- we refuse to be ripped off. Social Security is a system that started off with a small payroll tax rate, but one that has been increased over 20 times since the program's inception- now at 12.4% of the first $90,000 every American earns. In order to keep the system solvent (so it can pay out the benefits it promises), there are only a few solutions: raise payroll taxes even more, cut those benefits, or raise the rate of return on your taxes. President Bush says exactly that now, and former President Clinton said exactly this in the late 1990s.
Only one of those solutions can offer opportunity, instead of taking something away (like your money or your benefits)- and that is raising the rate of return. This is exactly why personal retirement accounts are such a great idea- by allowing Americans to invest part of their Social Security taxes in stocks and bonds, Americans can make more money off of those investments than Social Security could ever dream to promise them. Combining that with progressive indexing- a plan which grows benefits faster for the lower class, at a medium rate for the middle class, and at a slower rate for the upper class- the Social Security financing problem is virtually eliminated. The President's plan for Social Security reform consists of exactly these solutions: the choice for you to invest part of your payroll taxes in a personal account, and progressive indexing.
Most importantly of all, though, this plan offers something that no other plan can: choice and opportunity. If you want to try to go for the gold and invest part of your payroll taxes, you can choose to do so. You can choose the amount of risk you want to take, or you can play it safe. If you don't want to invest, you have the choice to keep those taxes in the Social Security system instead. Upon retirement, if you chose to invest part of your taxes, you will get money out of both your personal account and a smaller payment from Social Security. If you chose not to invest, you would get a bigger payment from Social Security, but you wouldn't have had the opportunity to get a bigger retirement paycheck, as you wouldn't have been investing in that personal account. The choice would be yours, and the power would be in your hands.
There are even more opportunities than this, however- if you chose to invest in that personal account, any money that remains in your personal account upon death can be sent to anyone you deem worthy. You could send it to your children to pay for their college education. You could leave it to your spouse so he or she can have a more stable financial future. You could donate it to a charity. You could send it to a close friend or a colleague who needs financial help. You could even send it back to the government (why anyone would do such a thing, I do not know). Under the current Social Security system, you can do none of these things- all the money you paid into the system stays in the government upon your death. Worse yet, if you died before the retirement age (65-70 depending on what year you retire), all of your Social Security taxes would remain in the government- but under a system of personal accounts, all of the wealth you accumulated could be sent to whomever you deem.
Which one seems like the more fair deal? The choice is obvious. We have an opportunity in these times to both fix the Social Security system's financial problems AND offer Americans more opportunity. Should we not do both? Why do one without the other? Social Security should not just be a tax that burdens every American worker until they retire. It should not just be a tax that constantly goes up as the system runs into financial problems. Social Security should be an opportunity for Americans to grow their wealth, an opportunity for those in the lower and middle classes to have a safe, secure, comfortable retirement. It should be an opportunity for people to invest in the markets; people who currently don't have the money to do so. It should be an opportunity not just for our generation, but for future generations- a chance to have each and every one of us leave our heirs and our loved ones a much deserved inheritance after we die.
For decades, Social Security had been called the "third rail of politics." Anyone who wanted to change the system- even to improve it- would immediately be run over by a giant train of fear mongers, political assassins, and those who didn't want others to fix a system they created or supported. That time is over- thanks to both President Bush and President Clinton, who both have brought Social Security's problems to the forefront in the past 10 years or so- we now have the opportunity to reform Social Security. Reform means improvement. Reform means opportunity. Reform means choice. Reform means stability. Reform means the solution to a burden that could threaten the pocketbooks of every single American in our generation.
The power in is your hands. Don't let this opportunity pass us by, for we may never have such a chance again. Our generation needs to make it clear to every member of Congress that we want this program fixed- and that we want opportunity to come with it. Contact your Senator or Representative, tell your friends how important this issue is to our financial future, and help make Social Security reform a reality.
-Sunny Sidhu
Posted by Jonathan Swanson| Comments (0)
June 09th, 2005Less talk, more action
June 09th 02:42:54 PM
Wall-to-wall with younger workers and members of Students for Saving Social Security, the Mansfield room of the Capitol was jam-packed, standing room only, of college students and recent grads impassioned for the need for Social Security reform.
http://biz.yahoo.com/prnews/050607/cgtu061.html?.v=13
While the Left continues to portray us as 'tuned-out' and 'turned-off' regarding Social Security, younger workers, when presented the facts, clearly understand the inherent problems of the current system, its certain collapse, and its basic inequality. We recognize the substantial benefits of allowing all Americans to invest a portion of their taxes into personal accounts, and we demand the freedom to choose to participate.
Gratefully, our voice is now being heard by congressional mavericks that are eager to work together across Party lines and seriously delve into discussion about finding a solution.
Reflecting the importance for reform, and their willingness to start a dialog, Senator Rick Santorum (R-PA), Congressmen Jim Kolbe (R-AZ), Congressman Sam Johnson (R-TX), and Senate Majority Leader Bill Frist explained the grave situation facing the current Social Security system, and the sobering consequences of not taking the necessary action to strengthen the program now. Former Congressmen Tim Penny (D-MN), Charlie Stenholm (D-TX), and Jim Slattery (D-KS), now out of office, were able to speak more candidly and spoke from the heart, sharing their personal concern for their own children and grandchildren.
After the Forum, titled "Coffee and Conversation", we personally hand delivered coffee mugs (sponsored by For Our Grandchildren) to all Senate members, requesting they would 'wake up and smell the coffee' on the need for Social Security reform.
Now, less talk - more action!
- Ursula Williams
Posted by Jonathan Swanson| Comments (0)
June 07th, 2005Congress: wake up and smell the coffee
June 07th 02:43:46 PM
Students for Saving Social Security is co-sponsoring a congressional coffee talk with it's partner, For Our Grandchildren, to show Congress that we want reform NOW! The coffee talk will be led by former Congressmen Tim Penny (D-MN) and Charlie Stenholm (D-TX) and will be attended by Senator Rick Santorum (R-PA), Congressman Jim Kolbe (R-AZ), and Congressman Alan Boyd (D-FL).
All Students who are able to attend are invited to come discuss the issues with these leaders of Social Security reform. The event will be held Tuesday, June 7th at 10:00 am in the Mansfield Room of the Capitol building (Senate side). All attendees must have a photo ID.
-Patrick Wetherille
Posted by Jonathan Swanson| Comments (0)
May 26th, 2005Who's representing you?
May 26th 02:52:58 PM
While Students for Saving Social Security is 100% student run and works on a grassroots level, the competing anti-reform group, Rock the Vote, is run by a middle-aged man who is supported by several CORPORATE sponsors. That's right, this "voice of young people" is partnered with Motorola, Cingular, AOL and TimeWarner. Click here; for the full list.
While they see corporate influence as an asset, we believe only in the power of the people and their ability to rise above big-money interests in fighting for fair and just social security reform through personal accounts. RTV, stop fronting like you represent us!
- Patrick Wetherille
Posted by Jonathan Swanson| Comments (0)
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