Keep Social Security

Living up to campaign promises, President Bush recently appointed a commission to develop a formal plan to privatize the Social Security system.

The President’s action is no surprise. He made privatizing Social Security one of his major campaign pledges last fall; and he also vigorously pushed creating personal investment accounts which would allow individuals to invest their benefits in the financial markets.

Nor is it a surprise that his 16-member commission is heavily weighted with Democratic and Republican politicians, and others who favor the same approach. Expectations are high that, after months of study, its recommendations will be significantly congruent with the President’s sentiments.

But the political, and financial, obstacles to making such a drastic change in the Social Security system are formidable: It’s generally agreed that revamping the system in that way would demand an infusion of as much as a trillion dollars over the next decade, along with raising the retirement age and reducing cost of living increases.

As one can easily see, all of these possibilities are political hot potatoes.

That side of the privatization mirage underscores how unwise talk of privatizing Social Security is. One need only look at the shakiness of the financial markets recently to understand the havoc playing the market could bring to Social Security beneficiaries.

African Americans must especially speak out against tampering with Social Security in this way because the Old Age Survivors and Disability Insurance program—its formal name—is so important to the economic stability of African-American families at all stages of life.

For more than a half-century, Social Security has protected American families from falling into poverty because of the loss of income due to retirement, death of a breadwinner, or disability. Because it provides people with a guaranteed retirement income, protected from erosion by inflation for a lifetime, it is the most important source of income for more than 80 percent of elderly Americans, and virtually the only source of income for the poorest 40 percent of them.

African Americans are particularly reliant on Social Security benefits. They’re 12 percent of the U.S. population; but they make up 17 percent of those receiving Social Security disability benefits and 22 percent of all children receiving Social Security survivor benefits.

A recent study by the National Urban League’s Institute for Opportunity and Equality, “The Impact of Social Security on Child Poverty,” defined Social Security’s importance to Black America in a dramatic way. It found that African-American children are almost four times more likely to be lifted out of poverty by Social Security than are white children.

Overall, Social Security benefits protect nearly one million children from falling below the poverty line. In fact, the Institute report determined that, were it not for Social Security benefits, 63 percent of very poor white families would fall into abject poverty, as would 71 percent of African-American families and 75 percent of Latino families.

Even families in a higher income bracket, those with children and incomes between $21,000 and $36,000, benefit dramatically from receiving Social Security benefits: those funds represent more than 30 percent of their annual income. Numerous studies have shown that keeping families with children from falling below the poverty line is critical to those children’s scholastic performance, and thus, to their having a viable chance to better themselves.

It is this bedrock, safety-net role activities of Social Security—and the people it helps—that would be jeopardized by diverting all or a portion of the payroll tax away from Social Security into individual retirement accounts.

Wealth accumulation and sound investment practices are certainly important goals to pursue.

But should society gamble with the economic well-being and consequent future of America’s citizens—especially its children—on untested methods when evidence exists to show that the current system, while flawed, benefits millions? We should remember and be guided by the fact that Social Security was enacted to be the safety net that individuals can rely upon in the event of financial setbacks that may come with private investments.

We agree that our Social Security system needs attention. There are good reasons to find ways to strengthen the system. But risky privatization proposals, which would increase retirement insecurity and undermine the viability of the survivor and disability components of the Social Security system, are not the answer.

Members of President Bush’s newly formed Social Security Commission would do well to remember that Social Security is more than a retirement program—it is an insurance program that provides for society’s most vulnerable families. The President’s commission would do well to follow the better path: strengthening the Social Security system, not reducing its protections.

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