1. SOCIAL SECURITY Elizabeth Stulpin & Meredith Riddell

2. PROBLEMS

3. Demographics Baby boom generation (born from 1946 – 1965) is reaching retirement age – Elderly population is expected to rise from 34 million to 80 million, increasing the elderly percentage from 12 to 20% by 2050 – In 2007, there were about 3.3 workers for every Social Security recipient – Projected ratio of workers to beneficiaries in 2030 is about 2.2 – Workers per beneficiary will decline, making the cost of OASDI (Old Age Survivors Disability Insurance) increase Life expectancy is increasing (more elderly to take care of) Fertility rate is falling from 3.6 children/woman in 1960 to 1.9 children/woman by 2020 (less than the 2.1 needed just to sustain the population)

4. Trust Funds OASDI cost will increase more rapidly than tax income between 2010 and 2030 Annual cost will exceed tax income starting in 2017 – Annual gap covered by Treasury cash until 2041 Social Security trust funds expected to be exhausted in 2041

5. Trust Funds OASDI annual cost rate is expected to increase from 11.21% of taxable payroll in 2007 to 16.59% in 2030 to 18.55% in 2081 In order to keep full benefits and manageable tax rates, an additional $4.7 trillion is needed over 75 years In 2041, benefits would have to be reduced 22%, with reductions reaching 25% in 2082

6. Elderly in Workplace Age discrimination is a large factor in job searches About 15% of elderly over the age of 65 were employed in 2001 Nearly 75% of individuals ages 70 and above earn wages in the bottom quintile of the overall wage distribution of those ages 50-61 – Elderly also report that they receive inflexible and the worst hours

7. PROPOSALS

8. Prevent Age Discrimination in Work Force Strengthen Age Discrimination in Employment Act and empower Equal Employment Opportunity Commission More elderly could be hired due to less discrimination – Puts more money into the Social Security system and delays payment of retirement benefits – Elderly have invaluable skills and experience to offer to workforce

9. Raise Taxes, Not Retirement Age Those making over $250,000 a year would be expected to contribute more in taxes – 2 to 4% more in total (combined employer and employee) Not going to raise retirement age – Retirement age right now is 62 – Increasing benefits for working past that marker

10. No Privatization Opposed to making Social Security privatized – In privatization, workers and employers would each pay 5% of wages, instead of the current 6.2% Social Security payroll tax, into private investment accounts Accounts would finance private life and disability insurance Protect those who put in money now, as they are not expected to receive full benefits when they retire Privatizing would allow for accumulation of individual wealth

11. Protect Pensions and Benefits Require Full Disclosure of Company Pension Investments – Obama and Biden want to ensure that all employees that hold company pensions receive detailed annual reports about their pension fund's investments, providing retirees with important resources to make their pension more secure. Protect Social Security benefits for current and future beneficiaries alike

12. Strengthen Retirement Savings Expand Retirement Savings Incentives for Working Families – Match 50 percent of the first $1,000 of savings for families that earn less than $75,000. The money matched will automatically go right into a personal savings account Create Automatic Workplace Pensions – Employers who do not offer a retirement plan will be required to enroll their employees in a direct-deposit IRA account – Obama estimates that this program will increase the savings participation rate for low and middle-income workers from 15 percent level to around 80 percent.

13. Strengthen Retirement Savings cont. Eliminate Income Taxes for Seniors Making Less Than $50,000 – This will provide an immediate tax cut averaging $1,400 to 7 million seniors Reform Corporate Bankruptcy Laws to Protect Workers and Retirees – Protect pensions by putting worker promises higher on the list of debts that companies cannot shed – Companies will not be able to issue executive bonuses while cutting worker pensions – Increase the amount of unpaid wages and benefits workers can claim in court and limit the circumstances under which retiree benefits can be reduced

14. POLITICS

15. Public Opinion More than 88% of Americans believe that Social Security is in trouble today or will be in trouble within the next 20 years More than 69% believe that Social Security will require ‘major’ or ‘radical’ change within the next 20 years – Among younger voters, about 50% believe that radical change is needed today – Support for reform cuts across all party lines – However, voters reject reforms such as raising the retirement age, raising payroll taxes, or reducing benefits

16. Public Opinion Only 7% of Americans age 18 - 29 expect to receive full benefits when they retire, along with only 15% of those age 30 - 39 More than three-quarters of younger voters support privatization of Social Security – Approximately two-thirds of all voters total or partial privatization

17. Campaign for America’s Future Think tank / advocacy group supporting a progressive agenda on economic issues, including Social Security Supports a campaign countering the privatization of the Social Security system and the raising of taxes to lower upcoming deficit Would support Obama’s proposal, as he is against privatization too

18. Rock the Vote Youth advocacy group that has teamed up with AARP Organized an extensive campaign opposing privatization plans Would not constrain Obama’s proposal, as he offers other ideas besides Social Security privatization

19. Civic Ventures Nonprofit organization working to expand the contributions of older Americans to society by promoting new ideas and strengthening infrastructure related to an aging population Would approve of tackling age discrimination – Want more of the American elderly to be involved in the workforce

20. Concord Coalition Nonpartisan, grassroots organization advocating fiscal responsibility while ensuring the future health of Social Security, Medicare and Medicaid Support raising retirement age, unlike Obama Support changing formula for determining the amount of available benefits for each worker Would oppose Obama’s plan, as they believe in more drastic changes than to simply raise taxes for some and not privatize or raise the retirement age

21. AARP Would be a major influence to either stop or help pass any Social Security bill Resists radical changes to the Social Security system – Against privatization Might support Obama’s proposal since there are no drastic changes to the system as a whole

22. Political Forecast We do not believe that this proposal will become a reality – Social Security is the “third rail” of politics – No one wants to pass legislation to attempt to fix Social Security’s problems, even though they know it needs drastic change – Obama’s plan seems to spend more money through tax cuts and savings plans than bring in new money to protect benefits – Citizens are against raising taxes, reducing benefits, or raising the retirement age, but still want all of their benefits A combination needs to be used to protect funds