Wednesday, February 3, 1999
Younger generations must voice opinions on Social Security
issue
AGING: Problems facing ailing system don’t just concern older
Americans
By Todd Flora
There is an important debate under way in Washington – and for
the most part, young people’s voices are not being heard. The
discussion about Social Security reform will have a direct impact
on you – on your bank account today, your tax rates in future
working years and your benefits once you retire.
In short, Social Security reform is inevitable, and everyone
from Westwood to West Virginia has a stake in the outcome.
The questions are difficult. How much should today’s youth be
expected to contribute to the retirement security of the 76 million
"Baby Boomers"? What will the doubling of the number of retirees in
our population do to our economy and the financial future of people
who attend UCLA today? Does the social contract need to be enforced
as is, or rewritten?
If taxes are raised, benefits are cut, or individual accounts
are added to the Social Security problem, how will young people’s
working lives and retirement plans be affected?
There are no easy answers to these questions. One fact is
certain: If the younger generations do not speak out for their
interests, they will not have a say in the final result.
The driving force behind the Social Security debate – the
demographic changes facing the country – cannot be avoided. The
United States is an aging nation. When Social Security was
established as a "pay-as-you-go" program (whereas benefits for
today’s seniors are financed by taxing today’s workers), no one
foresaw the Baby Boom generation.
Social Security was easily affordable when there were 5.0
workers for each beneficiary and the payroll tax rate was only 6
percent. The program is less affordable now that there are 3.4
workers for each beneficiary and the payroll tax has more than
doubled. The situation will get worse as the ratio of workers per
beneficiary continues its decline to 2.0 by 2030.
For these reasons, the program will begin running cash deficits
in 2013 according to the latest report released by the Social
Security Trustees. If this is allowed to happen, the government
will have to raise taxes, cut other spending or borrow from the
public to meet its Social Security benefit obligations.
Those three options should seem unsavory to UCLA students and
young people in general. After all, the young people of today will
be trying to raise families, purchase homes and pursue a better
life when this fiscal crunch hits.
Many people have suggested ways the Social Security program can
be reformed.
In addition to raising the payroll tax rate or simply cutting
benefits across-the-board, reform ideas range from raising the
eligibility age for full benefits to 68 or 70 (the age is currently
67 for today’s young people) to lowering benefits for the wealthy
through "affluence-testing."
Others have suggested that Social Security needs to be changed
fundamentally.
They contend that it would be better for people to save
something for their own retirement through the system instead of
relying completely on workers to pay all of the benefits.
The plan most often discussed is to add a system of individually
owned accounts to Social Security. A small part of the tax all
workers pay to fund Social Security would instead be placed in
these individual accounts, allowing younger generations to earn a
better return on their Social Security investment.
It is important to note that all of the reform ideas mentioned
above involve trade-offs. For that reason, all Americans – and
especially younger generations – must be a part of the debate.
Learn more about the issues. Call or write your member of
Congress. Get a friend to do the same. You will be surprised by how
few phone calls it takes to get a Congressional office to take
notice of your point of view. Encourage your professors, campus
clubs and campus leaders to host forums about Social Security.
The only way younger generations of Americans will have a voice
in this vital debate is if they take the time to get involved and
speak out. The public and elected leaders are debating these
reforms now. Remember, this is your issue, because America is
talking about your bank account, your future tax rates and your
retirement. The Social Security reform debate is not about the
elderly. It is about you.
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