The commission has been asked to recommend ways to allow workers to invest a portion of their Social Security payroll taxes into private retirement accounts. If no changes are made, revenues going into the program will start to fall short of benefits paid out by as early as 2016. Those in favor of the accounts argue that Social Security privatization would increase rates of return.

Although Bush pledged not to cut benefits for current retirees or those near retirement, he has not said how private accounts would be paid for while continuing to pay benefits. Privatization is estimated to divert $1 trillion out of Social Security over the next decade and would not prevent insolvency, but would speed it up by about 14 years. The recent multi-trillion dollar tax cut will not leave additional surpluses to offset those losses.

Most members of the Commission favor some mix of reduced benefits, increased payroll taxes, and big government borrowing to pay for privatization. Commission co-chairmen, former Democratic senator from New York, Daniel Patrick Moynihan, and Republican Richard D. Parsons, CEO of AOL Time Warner, announced in June that they would probably propose steps like raising the retirement age and reducing COLAs.

TSCL Member Alert! The Social Security Commission needs to hear from ordinary Americans who are concerned about the future of Social Security. The commission has been stacked with advocates of privatization. TREA Senior Citizens League has not been invited to give testimony. Please contact your Members of Congress to ensure that ALL voices are heard in this debate!

Visit our Legislative Action Center at Http://action.tscl.org/PresidentialSSCommission.asp  and send the online petition or write directly to the commission at: President's Commission to Strengthen Social Security, 734 Jackson Place, NW, Washington, D.C. 20503. Urge them to invite TSCL legislative staff to testify!

Sources: "Bush Social Security Panel Doesn't Fear Painful Solutions," Jackie Calmes, The Wall Street Journal, May 10, 2001. "Bush's Commission on Social Security May Propose Caps," Richard W. Stevenson, The New York Times, June 12, 2001. "Wall Street Firms Pony Up to Back Bush's Social Security Reform Plan," John D. McKinnon and John Harwood, The Wall Street Journal, June 12, 2001.

If you would like to learn more about the Social Security Commission's work, click here to read "Bush Reform Plan Might Create New Notch", www.tscl.org/newcontent/101102.asp

August 2001