Social Security has been one of our nation’s great success stories. It was created 66 years ago this month – on August 14, 1935, President Franklin Roosevelt signed it in law.

But Social Security was designed in an era when the average life expectancy was 65, and when families of 3 or 4 children were more rule than the exception. In those early years there were 30-40 workers paying Social Security taxes for every 1 retiree receiving benefits. Today, there are 3 workers for every retiree – soon there will be just 2.

Due to declining ratios of workers to seniors, the Social Security payroll tax, which was once just 2%, has now passed 12%, and economists estimate that it will have to rise past 18% if the baby boomers are to receive the same benefits as current beneficiaries. That’s equivalent to a 6% pay cut for future workers. For three-fourths of Americans, Social Security taxes are already higher than income taxes.

To meet these challenges, President Bush recently established the "President’s Commission to Strengthen Social Security" and placed at its head former U.S. Senator Daniel Patrick Moynihan – a Democrat from New York- and Richard Parsons – a Republican and Chief Operating Officer of AOL/Time Warner.

They head up the 16-member commission – evenly split between eight Democrats and eight Republicans – that will announce recommendations this fall for making Social Security more profitable and stronger for future generations. The President has made it clear their efforts must not and will not change Social Security benefits for retirees or near-retirees.

The importance of their presidential mandate was made quite clear in a recent tongue-in-cheek letter from former U.S. Sen. Bob Kerrey – a Democrat – to Chairman Moynihan:

"Dear Pat," he wrote. "In that I have a great and abiding interest in your success on the 2001 Social Security Commission and that I am willing to provide free advice, I offer the following two suggestions:

1. Start talking about the details of the most popular plan in Washington to fix Social Security.... It is called the: The Do-Nothing-Plan. The Do-Nothing-Plan discloses no details... Citizens who want to know the rest of the details must look to the Social Security trustees who will tell them this: The Do-Nothing-Plan proposes to cut benefits 25 to 33%.
2. Wealth should have a goal.... Our goal is to eliminate poverty amongst eligible Social Security beneficiaries. By the way, the Do-Nothing-Plan will increase poverty rates."

To address these two points the President’s bipartisan commission will recommend some degree of individual choice and account ownership which will allow current American workers to invest a portion of their funds – much like federal workers are allowed to do now.

By allowing people to invest a portion of their own funds, with safeguards, individuals will have the opportunity to earn higher rates of return and, therefore enjoy a more generous, more secure retirement. And unlike the current system, they will have something at the end of life to leave to a spouse, children, or charity.

We have a once-in-a-generation opportunity to safeguard the retirement security of our seniors, protect and empower current workers, and invest in an even better system for our children. The time to strengthen Social Security is now.

For more information, please read a few editorials I have written on this subject:

• Raiding Social Security?
• For Our Parents Today, and Our Grandchildren Tomorrow: Saving Social Security - Part I
• For Our Parents Today, and Our Grandchildren Tomorrow: Saving Social Security - Part II

Check out these News Releases on Social Security:

• Chairman Craig Reacts to President Bush’s Bipartisan Social Security Commission - May 2, 2001
  
  

Go straight to the source:

• The Social Security Administration
• The President’s Commission to Strengthen Social Security
• The history of Social Security