November 11, 2005

Commentary:

Reforming Social Security

By: Angela Lesh

“We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age,” stated Franklin D. Roosevelt of the initial signing of the Social Security Act on August 14, 1935. Seventy years later, President Bush wants to make radical changes in the Social Security system. His new plan has potentials to widen the rich and poor gap in America, as it would greatly decrease the percent of the population currently protected.

President Bush’s proposal on reforming Social Security is known as the Bush Plan, and it seeks privatization. A certain percentage of an individual’s social security taxes will be available to him/her for private investment. It would be great for individuals who have access to private financial advisors and other tools necessary to invest wisely. But, that’s not the case today. The majority of the population would be left to play in the risky world of stocks and bonds in hopes their future retirement will be secure.

What the Bush Plan fails to recognize is the damage it will inflict upon the average citizen. Most people will be able to access this money but many already live paycheck to paycheck. The access to more money would be overlooked when, at the end of the month, a family needs to put more food on the table and a few more gallons of gas during the month. Bush’s fails to recognize that the money will not be invested into a stock or a mutual fund but rather used for milk, bread, meat, etc. While the rich who do not need access to their social security get rich off of it in stocks, the poor will be getting poorer.

Bush needs to look at the consequences of his plan. Instead of creating a whole new capitalist minded act, his economic team should be reviving the socialist format that has brought a good life to millions of citizens. We may not have the best social security program in the world, but at least it helps those in need.

Let’s look at a better option. The current tax shield begins at $90,000. If the income tax bracket were raised to $140,000, the revenues would greatly increase to sustain the program for almost half a century more. Another small step to increase revenues for the Social Security Department would be to adjust the age in which citizens begin collecting social security. Currently at age 65 and individual is able to collect social security and still work; however, they cannot exceed their working income at a certain point. Since citizens are still able to work at the current age of 65 adjusting the age to 67 would save millions of dollars a year and still bring in social security taxes from the individuals that stay in their current job.

All of these minor adjustments will sustain temporarily the current Social Security program until we find a permanent solution that all American citizens, rich and poor, deserve. What the President favors today will only create more tension in the realm of social security and retirement. While at the same time the plan will become the worst enemy to a society that prides itself on giving equal opportunity to every man and woman when the rich and poor gap grows.

Angela Lesh is a student at California State University, San Marcos

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