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Congressman visits to explain Social Security reform
March 21, 2005 —
U.S. Congressman Dave Camp was on campus discussing President Bush's plan to privatize Social Security during a "Pizza and Policy" Luncheon on Monday, Mar. 7.
Dozens of SVSU students and staff filled the Student Center Unity Room to hear the Republican from Midland emphasize the dire situation of the nation's current Social Security system and hear the projected plans for reform.
Those in attendance – including SVSU President Eric Gilbertson – were given packets filled with statistics detailing the inevitable implosion of the country's current system. The figures portrayed a nation filled with retirees who continue to live longer, drawing more Social Security and slowly draining the allocated dollars.
Indeed, the increase in life expectancy is one of the greatest contributors to the problem.
According to Camp, the average person lived only 13 years past their retirement age in 1940. This number has been steadily climbing since and is expected to reach approximately 21 years by 2080. As a result, Camp said a system that has relied on current workers supporting current retirees is failing.
Camp also reported that the United States had 16 workers per every one Social Security beneficiary in 1950. This type of ratio enabled the system to remain intact. According to Camp, there are only three per beneficiary today and that ratio will fall to 2-to-1 by the time today's young workers retire. These figures translate to a Social Security cash-flow deficit beginning in 2018 and a program forced to reduce benefits in 2042.
Camp insisted that the Republicans have an answer. He explained that privatizing Social Security and creating personal retirement accounts would yield a better return, translating into a better system and eliminating the crisis.
The accounts would be used to invest in low risk bonds and rely on "the miracle of compound interest."
Camp also stated that the proposed program would mirror the current accounts available to federal employees.
Camp devoted a large portion of his time to easing the minds of those in attendance worried about the affects of privatization.
He promised that current retirees would not have their benefits cut, saying, "we must strengthen the Social Security system for future retirees while guaranteeing no cuts in benefits for current retirees and anyone 55 years and older. Those at or near retirement have spent a lifetime paying into the system and they deserve the benefits we promised."
He also explained that the new system would not be unlike the existing one, as current social security dollars are invested as well. Camp explained that most retirees use up the equivalent of what they've contributed in just a few years of retirement, emphasizing the importance of the worker to beneficiary ratio and the need to create extra dollars.
While Camp admitted that it would be decades before any real cuts would have to be made, he added that "doing nothing is not a viable option" and that if we continue to wait, "each year it will get harder to fix." He then used the analogy of an aircraft carrier to describe fixing Social Security, saying that trying to turn one around requires "a lot of time and open water."
He used this comparison to stress the importance of getting today's young workers involved early, insisting "thirteen years is a blip when it comes to retirement issues."
Camp concluded by admitting that the freshness of the new concept is the weak point in the planned reform. He mentioned, however, that a recent poll showed most Americans were concerned with Social Security and emphasized the need for reform.
"It takes a long time to affect change," he said. "And there's a real price tag with waiting."