Democrat's View of Social Security Reform

The Social Security retirement system was created to help alleviate poverty among elderly Americans and meet the retirement needs of all workers. Social Security has become the single most effective federal anti-poverty program in our history, lifting more than 11 million seniors and countless disabled workers out of poverty. For many seniors, Social Security is the only retirement security they have.

The future of Social Security is the subject of great debate in Washington. Recently, I testified before the House Ways and Means Committee to stress the need to protect Social Security and to highlight the negative impact some proposals will have on seniors. As first vice-chairman of the Hispanic Caucus, I highlighted the danger to Hispanic seniors who more than others rely on Social Security as their only retirement income.

Once again, the Bush Administration and congressional Republicans are seeking changes that will undermine the long-term financial health of the system. Last year, the President's Social Security commission recommended, not surprisingly, the creation of privatized Social Security accounts. Now congressional Republicans are trying to implement these changes. This plan forgets the fundamental purpose of Social Security -- to provide a guaranteed benefit to all workers -- and puts the entire system at risk.

In light of the irresponsible handling of retirement accounts at Enron and the recent downturn in the stock market, the continued push for privatization is incredible. Now more than ever we must stand by the promise of Social Security as a safety net available to retirees who otherwise would have nothing.

Social Security privatization would drain $1.5 trillion from the Social Security program while exposing individual workers and their families to greater financial risk. Taking that much money out of the system means they either cut benefits for retirees or increase the national debt by that much more. The President's Social Security commission recommended a privatization plan that cuts benefits for future retirees by up to 46%. Busting the budget limits again just means saddling our children with debt, higher interest rates, and slower economic growth. Under privatization, benefit levels would be determined by the fluctuations of a volatile stock-market, by a worker's luck in making investments, and by the timing of his or her decision to retire. Just as one example, there were 15 years in the last century in which the stock market dropped by more than 40 percent in the previous decade. Social Security was designed precisely to make retirement secure, not a roulette wheel of chance.

While Social Security privatization and mismanagement of the Trust Fund are bad news for just about everyone, Hispanics and women are hit especially hard. Many of our poorest seniors are Latino. Current census figures reveal that nearly 20% of Latino seniors are living below the poverty line. Latinos are also concentrated in low-wage jobs that provide few benefits, leaving them with no resources upon retirement outside of Social Security. Latinos now represent 8% of the total American workforce. Only one-third of them, however, are currently covered by a private pension plan compared with half of the general population. Even more daunting is the fact that, by 2020, the number of Latinos over 65 years and older will nearly double. The health of Social Security is vital to Hispanics.

Women, more than any other group, may be the most severely impacted by attempts to reform Social Security. One-third of all women age 65 and older receive 90 percent of their retirement income from Social Security. More so than their male counterparts, Hispanic women are less likely to have access to private pension coverage and they tend to receive the lowest wages of any category of worker.

The great promise of Social Security has been its dependability, the guarantee of the United States government that we will not let seniors down in their time of need. We must not deplete the Social Security Trust Fund, and we must not put seniors' retirement at risk of financial collapse in the stock market. Everyone who puts into the system must know they will be able, when they retire, to have some sense of security. For those who can afford it, they should take advantage of other retirement investment options. But for the millions who rely solely on Social Security, we as a great Nation must not let them down. Not today, and not tomorrow.