The Incredible, Shrinking SS Check | Jackson Free Press | Jackson, MS

The Incredible, Shrinking SS Check

Mississippi, like many so-called "red" states, gets big returns for its tax dollar. The report "Federal Tax Burdens and Expenditures by State," explains that the state gets back $1.84 out of every $1 it pays to the federal government, ranking it as No. 4 on the report's big "winners" list. These benefits include Social Security money, which according to the National Women's Law Center, 22 percent of Mississippians enjoy. This compares to California's 16 percent and Alaska's 12 percent. The idea of tampering with Social Security, consequently, has a heady impact among Mississippi voters.

The White House is still catching serious resistance to its attempts to enact sweeping changes to the 70-year-old retirement program. A Gallup poll, conducted Feb. 25-27, showed that only 35 percent of Americans approve of Bush's handling of Social Security, while 56 percent disapprove. This poll showed a decline in support; in early February, 43 percent approved of Bush's plan.

Rep. Bennie Thompson, D-Miss., says Bush's gusto isn't helping sell the plan. "Everybody says 'why would you do such an extreme adjustment to the program that at this point will provide benefits for so long?'" said Thompson, who hosted two Social Security town hall meetings in Jackson and Clarksdale Feb. 28.

Bush is predicting the system to crumble in a matter of years, while Democratic opposition forecasts a viability of about 40 years. Even the official Web site of the U.S. Social Security Administration says a 25-year-old will only have benefits cut by "27 percent and could continue to be reduced every year thereafter" when they reach age 63 in 2042, unless changes are made. "f you lived to be 100 years old in 2079 your scheduled benefits could be reduced by 33 percent from today's scheduled levels," the site says.

A benefits cut is not the equivalent of a program's annihilation, said Thompson. "They were hearing statements from the president that the system's broke or teetering on bankruptcy, and they were concerned. We informed them that even if we spent just like we're doing right now, the only potential shortfalls will come in 2042, meaning you'll only probably get about 80 percent of the money you're drawing now," Thompson said, adding that crowd of participants over 50 showed visible relief.

The younger generations in attendance, however, harbored visuals of shrinking Social Security checks in their golden years and had questions regarding the privatization plan, thinking their benefits might profit through stock market investment.

Polls suggest that this concern is reflected on a national scale, with the president getting the strongest support from the youngest voters in the debate over adding individual investment accounts to Social Security. A recent USA TODAY/CNN/Gallup Poll found that most young voters support private accounts even if that means cuts to guaranteed benefits. By 55 percent to 42 percent, those under 30 call it a "good idea." Thompson said his meetings reflected this, explaining that many of the younger participants seemed to doubt Bush could pull it off.

"They didn't trust him," he said, "and we [Democrats] don't believe it, either."

Republicans are largely standing firm with the president, though some worry if their support will chomp them in the 2006 elections. As of March 6, the White House has not laid out a detailed blueprint for the Social Security overhaul, and congressional Republicans have been sending mixed signals about their willingness to back some elements of the president's plan. Senate Majority Leader Bill Frist, R-Tenn., appeared to backtrack last week after saying recently that he was uncertain whether a bill would reach the Senate floor this year. The next day, Frist said, "We need to do it this year ... not next year."

More than 40 Democratic senators have signed a letter saying they want to deal with Social Security's long-term financial shortfall but want Bush to "publicly and unambiguously announce" that he no longer supports private accounts funded by payroll taxes.

Sen. Trent Lott, R-Miss., shows no weakness. "Clearly if we put off addressing this issue, soon only two workers will be paying the benefits for every one Social Security recipient, down from about three right now and sixteen in the 1950s," said Lott in a recent statement. "When young Americans entering the work force today retire, the system will be paying out much more than it is taking in, and it will be on the way to going broke."

Lott attempts to explain the mechanics behind private accounts. "If you are 55 or older, you'd see absolutely no change in your Social Security benefits. My 91-year-old mother will continue receiving the same Social Security benefits she has now. But, if you are younger than 55, you'd be offered a chance to participate in personal accounts—savings that can be invested in various funds and grow much faster than anything possible in the current system," he writes.

The senator does not address the argument that diverting money from the Social Security reservoir to finance private accounts will cut into the general fund and take a bigger slice out of benefits at a faster pace than forecasted—a fiery counter that Democrats have taken up as mantra. When pressed on the issue, Lott's press secretary Lee Youngblood does not deny that cuts will result from the onset of private account diversions. His counter is that something has to be done about it.

"Social Security, since its inception, has been a huge fund out there and unfortunately Congress has been taking out of it pretty regularly. Sen. Lott has been reluctant to reform Social Security, but now if you look at the price of doing nothing the price paid by doing nothing is going to be much greater than anything else," Youngblood argued.

Indeed, benefits will not exist in their current form under continuing circumstances. Democrats say they have a solution for this, however. That it is a vexing proposal to many Republicans is considered, by some, a plus.

"Rich people get a break after $90,000. Fixing that could make up for any shortfall in the program," Thompson said. "Right now, people who make above $90,000 only pay on the first $90,000. One option is to allow us to raise that cut-off point in terms of maybe $120,00 or $150,000—or whatever you make you put into the system."

Americans, according to another Gallup Poll, seem to like the idea that the wealthy should help bolster Social Security. More than two-thirds of 1,010 adults contacted supported limiting benefits for wealthier retirees and for higher income workers to pay Social Security taxes on all their wages.

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