Groucho Had It Right
By: Source: AARP.org Date Posted: 2005-04-26 17:14:23
Politics, said Groucho Marx, is the art of looking for trouble, finding it, misdiagnosing it and then misapplying the wrong remedies.
Groucho's words are especially relevant since the future of Social Security is re-emerging as a campaign theme for candidates from both parties during this year's elections. The rhetoric likely will produce a lot of heat but not much light.
Social Security's future is an important campaign topic, especially given the financial crisis that has affected so many retirees and those nearing retirement. But as you listen to the candidates discuss this issue, it is important not to get caught up in the smoke and mirrors.
Social Security isn't perfect, but it isn't broken, either. It will be able to pay full benefits until 2041. That means that benefits for today's retirees and those nearing retirement are safe. After 2041, Social Security can still pay over 70 percent of its promise. But that's not good enough.
How do we fix the problem? One proposal would allow people to invest part or all of their Social Security tax dollars into private retirement accounts.
Proponents of this "carve-out" idea tell us that people will get a better return on their investments in private accounts.
We are very concerned about this remedy. Carve-outs don't improve solvency; they make it worse by taking more money out of the system. This approach also overlooks the fact that Social Security's benefits are guaranteed throughout one's life and that Social Security is much more than a retirement program. Almost one in three beneficiaries today is not retired.
We are not categorically opposed to private retirement accounts. We encourage people to invest more in their own personal savings accounts, IRAs and 401(k) plans. We support the creation and expansion of supplemental individual retirement savings, but these should be in addition to not a replacement for Social Security's guaranteed benefits.
Social Security deserves discussion during this campaign, but it also deserves more attention to the facts. The carve-out approach depletes Social Security's funds sooner while shifting more risk to individuals.
So when you hear the rhetoric begin around Labor Day, take a deep breath, review AARP's Voters Guides from your state office to find out where candidates stand, visit our Web site (www.aarp.org) for the facts about Social Security and ask the candidates to apply the right remedy to Social Security one without carve-outs.
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