Reform Movement Welcomes Social Security Advisory
May 14, 2003
Beginning May 1, annual Social Security statements will include an advisory stating the system's impending insolvency. Aparna Kumar, a staff writer for the Los Angeles Times writes: "Your next annual statement from the government estimating your Social Security retirement benefits will state in blunt language that those funds are in jeopardy."
Some opponents of personal accounts claim that Social Security does not even face a financial crisis and have left reformers with a one-sided debate. Previously, annual statements mentioned nothing about the system's looming insolvency and promised to pay large scheduled benefits.
"The warning … will be included in the annual letter from Social Security to 138 million workers over the age of 25, estimating their benefits under various retirement strategies," writes Kumar. "[The] Social Security Administration will tell them: 'Action is needed soon to make sure that the system is sound when today's younger workers are ready for retirement.'"
Kumar adds, "The Social Security letter estimates that the number of people over 65 will double within 40 years. Thus the number of Social Security beneficiaries will grow much faster than the number of workers who are paying the payroll tax. … 'By 2042,' [the letter] warns, 'the Social Security Trust Fund will be exhausted.'
"Carolyn Cheezum, a Social Security spokeswoman, said the beefed-up language was designed solely to 'educate the public. The point is to make the information in the statement more clear and easy to understand so that the public can take part in the discussion about its future.'"
Despite this clear warning that Social Security will be insolvent without structural reform, some still advocate the system's strength. Says Kumar, "David Certner, director of federal affairs for AARP, a seniors' lobby, said the new letter gave fresh emphasis to the retirement system's solvency. … [He] said: 'Some who are interested in more radical reforms have tried to create a crisis atmosphere about Social Security's financial condition. We believe Social Security is not in a crisis.'"
Inevitably, these advisories will encourage opponents of reform to participate in the debate on how to sustain the system.
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