News Release

Perspectives on Social Security


Director of the Social Security Project of the National Association of Commissions for Women, Zuckerman said: “Privatization would be a double whammy for women: Privatized personal accounts primarily benefit the highest earners, who tend to be men, and many of the proposed benefit cuts would harm our lowest earners, most of whom are women. Most women earn $25,000 a year or less. No matter how good their investments, they are not going to do better under privatization than they would under the current system. For starters, personal accounts have high administrative costs that may cost more than the dividends will pay. And, more important, the current system provides a safety net for stay-at-home mothers, women who care for disabled or ill relatives, and for divorced, separated, and widowed women.”

Associate professor of economics, University of Notre Dame, Ghilarducci commented that President Clinton “said no to privatization and said yes to using general revenues to help fund Social Security. Also, he acknowledged that older women need more money — implying that Social Security should be expanded to address poverty among older women. Furthermore, to get a higher rate of return, we don’t need to go to the stock market; we can shift some assets to some higher risk, longer term government bonds.”

Director of the 2030 Center, a public policy organization for young adults, Riemer said: “Young people today are benefitting from Social Security. One-third of beneficiaries are not retired. They are widows, orphans, disabled workers and their family members. Social Security is the lifeline for millions of young families to move on from disaster. Privatization is a trap for Gen X, since it cuts our benefits markedly. The theory that the privatized accounts will make up for the decrease in benefits is false. It won’t come close. It’s a corporate boondoggle. The `USA accounts’ that Clinton proposes on top of Social Security are a good idea.”

Co-author of the forthcoming “Social Security: The Phony Crisis” and research director at the Preamble Center for Public Policy, Weisbrot said: “The fact that Clinton’s plan does not propose any privatization or benefit cuts is certainly a victory for the public. However, there are two things that everyone should know about Social Security: First, it is not facing any significant financial problem for the foreseeable future. To balance the system for the whole 75-year planning period would require less than 1 percent of our national income. Second, investing any funds in the stock market is unlikely to help anything. Under the Trustees’ slow-growth projections, the market cannot provide the returns that President Clinton is assuming. And of course if the economy grows fast enough to provide these returns, then Social Security will run an enormous surplus indefinitely.”
More Information

For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167