2008 Woodie Awards
Future of Social Security discussed among Lewis faculty, staff, and students
Heidi Bloom
Issue date: 4/25/05 Section: News
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Generally social security is a deduction tax paid by current workers, but it ensures an income to people who are unable to work anymore. Bush wants to gradually make cuts to social security. He wants Congress to allow Americans younger than 55 to eventually keep 4 percent of their income that goes to social security to put in a private account.
In exchange, the workers will except major benefit cuts and gamble with the hope that they make money in the stocks. Those who choose to privatize a part of their payroll tax would invest the money in stock and bond funds that they could not touch until they retire. The money that is personalized could be passed down to their family members which they can't do with the current system.
Unfortunately this leaves many people with the responsibility of relying on money that may not be enough for retirement.
The downfall of this plan results in the loss of money for the lower income retirees. If a lower income retiree puts money into stocks and loses it, then there is not enough money from the smaller benefit package to keep them above poverty. Also not very many people have the knowledge on where, how much, or what to do with there money in stocks.
Student Sarah McKinney said, "Not everyone is knowledgeable about the stock markets, some people just won't take the initiative to research a safe place to put their money." Also, there is the risk of the person to spend the money before retiring and not have enough money from the guaranteed benefit plan.
Lindalee Adams, library reference, said, "you can't necessarily say privatizing is good or bad, it just depends on the individual." Under this plan, low income workers would be required to choose a plan that pays a steady amount of money until the person dies. High income workers have given more out to social security and would have enough to live off for the rest of their life.
Though Bush admits to cutting down $2 trillion from social security and increase the deficit within ten years, he also says that if we don't change the plan we will be giving more money out to social security than we have coming in. An employee of the Lewis Business office said, "If the government didn't dip into social security for other reasons other than giving benefits out, then we would be having a problem with shortage of money right now."
Having private accounts gives certain people the chance to make money in stocks and end up with more money for retirement than otherwise would have attained. This system is said to give freedom to people and be the true American plan.
People who want to risk losing their money could end up making more than expected and not needing as much social security. If the system works correctly than everyone will make money and the deficit will go down.
As both sides have pros and cons, everyone agrees the social security system needs improvement from what it is currently now. Unless Bush can persuade the Democrats and doubtful Republicans privatizing is a moderately safe option for low-income workers, his proposal is likely to fail.
