By Representative Henry Cuellar (TX-28)
I have always said one thing; I am here to put the best interests of my community on the table. In the last month, I have received over 450 letters opposing the Administration's proposal to privatize Social Security and only 3 in favor. I have taken a great deal of time to carefully review the proposal and to listen to all sides of the debate here in Washington as well. After thorough analysis I have come to see clearly that this proposal to privatize Social Security does not pass my legislative test: It will not make our families stronger. The current proposal to privatize Social Security jeopardizes our safety net by pulling the Security out of Social Security. It takes our guaranteed benefits and gambles them on the stock market. It guarantees a cut of over 40 % in benefits and assures adding 5 trillion dollars to our existing seven trillion dollar debt.
The plan to privatize Social Security would affect every worker in Texas. If the plan were in place today, the guaranteed monthly benefit for the nearly 3 million people receiving Social Security benefits in Texas would drop to $378 --a cut of almost 50 percent.
In addition to these benefit cuts and risking our savings on the stock market, privatizing Social Security would bring the federal government even deeper into debt. Switching to a private account system requires borrowing more than $5 trillion from foreign countries and will increase our debt for the next 60 years.
Not only does this threaten rising interest rates today, it also raises taxes on our children and grandchildren tomorrow.
Advocates of the proposal like to say that opposition to the current privatization plan is support for inaction. Nothing could be further from the truth. Social Security is clearly in need of reform and there are several proposals worth bringing into the debate.
One widely discussed proposal points out that the wage cap, the point at which wages are no longer subject to Social Security taxes, today is at $90,000. Raising the wage cap to about $140,000 could potentially solve a substantial portion of the problem at hand.
Another proposal would make Social Security a truly universal system by including all newly hired state and local government workers. Currently, nearly 7 million local and state employees are not covered by Social Security, but rather by employer-operated retirement funds. They contend that bringing new workers into Social Security could help fund the system.
In the end, this is a tough situation that requires making tough decisions. However, I want the residents of our community to know that I believe we should carefully consider alternatives that may alleviate the problem instead of rushing to push for proposals that could potentially make it worse.
I have already made progress in working to protect Social Security on Capitol Hill. Just last month, I co-sponsored the Social Security Truth in Budgeting Act of 2005. This bill would remove Social Security funds from the federal budget and ensure that Social Security funds are spent only for their intended purpose and not for new spending or new tax cuts.
The bottom line is, we aren't talking about numbers and projections, we are talking about the future of the American people. Social Security has always been the one source free from risk, designed to serve as a bedrock guarantee for our seniors.
The system was created and has served for generations as social insurance, not social investment, and we owe it to our seniors and our children and ourselves to preserve that guarantee.
September 2005
