By John Watson
Social Security is one of the most successful and popular programs in the history of our country.
Today more than 50 million beneficiaries receive payments from Social Security. While mostly thought of as a retirement benefit, about 1/3 of beneficiaries are disabled workers and survivors of deceased workers, including more than 4 million children.
In the years following World War II private pension plans through employers became widespread. These defined benefit plans guaranteed a monthly benefit upon retirement. Since 1980 such plans have been increasingly abandoned and replaced by 401 (k) plans that do not provide guaranteed payments. Anyone who has received a 401 (k) statement recently knows how the drop in the stock markets (where most such plans are invested) have hammered retirement funds. In effect the investment risk has been shifted from employers to workers.
Pres. George W. Bush, with backing from Sen. John McCain, proposed partially privatizing Social Security by allowing workers to put up to 20% of payroll taxes into private accounts that could be invested in stocks. With the recent declines of more than 25% in stocks (a periodic occurrence sure to be repeated in future years) it is easy to see the disastrous effect this would have had if such a plan had been in place.
Sen. Barack Obama and Sen. Joe Biden are committed to preserving Social Security. Both Obama and Biden opposed the Republican plan to privatize which McCain supported. Obama also opposes cutting benefits or raising the age of retirement as some have suggested. To address long term funding soundness, Obama is considering a plan to ask those making more than $250,000 to pay slightly more payroll taxes (under current law all earning above about $100,000 are exempt from payroll taxes). In addition Obama proposes that all seniors making less than $50,000 per year have income taxes eliminated.
Social Security has lifted millions out of poverty in old age since its inception in 1935. Every family in America benefits from Social Security. Obama will protect the integrity of Social Security.