The Social Security Act is part of the new deal pledge of President Franklin Roosevelt to the American people upon his inauguration. Now, nearly 70 years and many amendments later since its first implementation, it still works for most, specifically the elderly and other citizens of various age brackets who are disabled and unemployed.
Almost all workers in the United States pay Social Security taxes which entitles them to collect benefits. As such, almost 50 million Americans avail of monetary benefits in the form of checks from the Social Security system. Nearly two-thirds of those retired from work depend on their Social Security retirement benefits to compose half of their incomes. Still, for every five persons, one of them depends entirely on their Social Security benefits as their only income.
Social Security has been looked upon by the people as their protection against forces they cannot control whether it is economic upheavals, inflation, investment markets fluctuation, disability or premature death. It is considered as a safety net by most even during the best of times and especially in the advent of worse situations in their social standing.
Since the program's initiation, the benefits workers get depended on their earnings during the course of their careers. Now, with the privatization issue, President Bush aims to change this system so that the amount each retiring worker need to collect from Social Security depend on the size of investments in his or her own personal account, instead.
Last 2002, the President's Commission to Strengthen Social Security have already outlined three proposals that goes along this line. Analysis of the proposals turned out that there is federal borrowing, tax increases and benefit cuts involved in order to pay for creation of new personal accounts while maintaining the provision of benefits to current beneficiaries. The benefit cuts may amount to $3 trillion over the coming decades.
As the arguments grow, it is becoming quite apparent that even if President George W. Bush is confident that creating private accounts for Social Security beneficiaries will have positive outcome, its adverse effects cannot be dismissed.
According to President Bush, these changes are necessary to salvage the Social Security from a financing shortfall which is being projected by its trustees. According to them, the Social Security may only be able to pay benefits until 2042. After this year though, only about 70% of those currently promised benefits may be able to receive such.
Those against the propose privatization have expressed doubts that creating private accounts would improve the Social Security's problem. According to them, in may dampen the country's economic growth. They also fear that the present insurance to safeguard workers and their families from death and disability would be threatened. Retirees will also be unprotected from inflation. The women, young people (next generation of beneficiaries), African Americans and Latin Americans are vulnerable and stand to lose a lot.
As the arguments rages on, it is better to keep up with the news about this vital issue. The main point is that Social Security is a safety net for most of the United States residents. Whatever change or amendments on its policies and implementation may be, the main purpose of its creation almost 70 years ago must still be intact.