WHEREAS:
Social Security is the nation’s great system of income protection that enables workers to pool their contributions in order to protect each other and their families from catastrophic wage loss due to death, disability or retirement; and
WHEREAS:
Social Security covers nearly all American workers as an earned right, with benefits that are guaranteed by the U. S. government as a reliable income floor on which to build with pensions and personal savings; and
WHEREAS:
Social Security is America’s top poverty fighter—keeping twice as many Americans out of poverty as all other income-tested programs combined—because benefits are designed to give extra protection to low and moderate wage earners, because cost-of-living adjustments help benefits keep up with inflation, and because benefits are paid every month for as long as a beneficiary lives; and
WHEREAS:
Social Security links the generations because it’s "pay-as-you go" -- today’s workers contribute payroll taxes that provide retirement benefits for their parents, just as the payroll contributions paid by their children will one day provide benefits for them; and
WHEREAS:
Social Security’s near-universality gives Americans a sense of national community and demonstrates that we care enough for our families and neighbors to want to protect each other against the potential hazards of life; and
WHEREAS:
The Social Security trustees say the system is in good financial shape, able to pay full benefits, on time, until 2032; and
WHEREAS:
After 2032, when nearly all the baby boomers have retired and a smaller workforce will be supporting a much larger generation of retirees, Social Security will experience a 25% shortfall and will need corrective measures in order to ensure that full benefits are paid far into the future; and
WHEREAS:
This is a manageable long-range problem, which can be solved in a variety of ways—including a mix of possible changes in revenues and benefits—without dismantling the fundamental insurance structure of the successful Social Security system; and
WHEREAS:
Radical proposals to privatize Social Security—or a portion of the system—by replacing it with IRA-type personal investment accounts have received considerable media attention, but do not offer a viable option for strengthening Social Security; and
WHEREAS:
Personal investment accounts would destroy Social Security’s social insurance structure and introduce stock market risk to a system that is supposed to protect Americans from risk; and
WHEREAS:
Personal investment accounts would reward the highest-paid workers, who will have the most to invest, will be able to withstand the most risk, and tend to have the most stock market experience; and
WHEREAS:
More Americans will lose than win with personal accounts, including young workers who become disabled before they’ve had enough time to accumulate assets, retired women who outlive their accounts, and low- and moderate-wage workers who will depend on their successful investing of limited account assets to assure their most basic retirement security; and
WHEREAS:
Every percentage point of the payroll tax that goes to private accounts will come directly from the current benefit formula—demanding steep benefit cuts—and investment companies, which stand to make billions from Social Security privatization, will require payment of high management fees that will come directly from workers’ accounts; and
WHEREAS:
Converting the Social Security system to private accounts will mean workers will pay twice—once to keep the current system going for retirees and soon-to-be retirees, and again to fund the new system for their own retirement—with overall transition costs amounting to as much as $2 trillion.
THEREFORE BE IT RESOLVED:
That this AFSCME International Convention reject dismantling Social Security and privatizing the system—or a portion of the system—with personal investment accounts; and
BE IT FURTHER RESOLVED:
That AFSCME work, instead, for federal legislation that would strengthen the current Social Security system for the future and provide Americans with more opportunities to build on their Social Security through employer-sponsored pensions and savings plans.
SUBMITTED BY: INTERNATIONAL EXECUTIVE BOARD