Muncie Times, Muncie, Delaware County, 15 April 1999 — Page 22

The Muncie Times, April 15,1999, Page 22

SOCIAL SECURITY Social Security needs long-term solution

By Kenneth S. Apfel Commissioner of Social Security

President Clinton has consistently made the point that he wants to resolve the long-range Social

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Security financing issues now, while there is no immediate crisis. The president established a process for accomplishing this goal. He called for a year-long national nonpartisan dialogue on Social Security which culminated in a White House Conference on Dec. 8, 1998. Early next year we will begin bipartisan negotiations on meaningful reform. The public’s understanding of the Social Security program is not strong. And that is not surprising. While Social Security has been a part of the American landscape for more than 60 years, it is also a complex social insurance program. One of the critical roles in the national dialogue has to be to educate the public about the Social Security program of today so that people will be better able to help decide what the Social Security program of the next century should be like. I think that there are a few basic facts the American people need to know: • People need to remember how important Social Security has been to their parents and grandparents. In the last 40 years, Social Security has helped cut the poverty rate among the elderly by two-thirds—from 35 percent to less than 11 percent today. • People should know that Social Security is more than retirement. It is America’s family protection plan, providing valuable survivors and disability insurance protection. About l-in-3 Social Security beneficiaries are not retirees. • People should know that Social Security forms a solid foundation on which people can build retirement security. Pensions and personal savings should always be part of a sound retirement plan. But too few Americans save as much as they should. • People should understand that the main reason for Social Security’s long-range financing problem is demographics. We’re living longer, healthier lives, which is good news. By the year 2030, we will have nearly twice as many older Americans as today. At the same time, while today there are about three workers for every beneficiary, in 2030 there will only be about two workers for every beneficiary. People need to understand the economic facts about Social Security. Before 1903, Social Security operated as a pay-as-you-go system. Legislation created partial reserve financing. The trust funds today are building reserves. By 2013 benefit payments will begin to exceed tax collections. The trust funds will be exhausted in 2032 if no changes are made. Finally, people should understand that there are choices to be made. Each choice involves trade-offs. We will need to look at the pros and cons of each. Only then can we ensure that Social Security will be there for future generations and that it will remain part of the fabric of American life.People planning insurance needs should note that while private insurance coverage will generally not affect their Social Security benefits, workers’ compensation and other public disability payments may.