Social Security: Is it Time for Reform?

Many conservatives in congress as well as the Bush administration want to enact a new Social Security reform, dubbed privatization, which will allow workers to invest a portion of their social security tax in to the stock market. Social Security currently taxes 6.2% of the first 80,000 dollars of income per year, and then the employer also pays an additional 6.2% of the workers income in to social security. The proposed plan would allow workers to invest $1000 of their social security tax in private investments, such as the stock market, bonds and commodities, and would be then allowed to draw from it once they retire.

Republicans in congress argue that Social Security will face a crisis soon if action is not taken to remedy the social program. They believe that when the large group of baby-boomers retires, Social Security will face a huge budget shortfall due to the far fewer workers per retiree in the system. A 2003 Social Security Trustees’ report stated that Social Security would face a deficit starting in the year 2018 and would be bankrupt in the year 2042.

However, Democrats have argued that Social Security is healthy and successful since it has been around for seventy years. They counter the 2018 year by stating that the Congressional Budget Office’s reports state that Social Security will be solvent until 2052, when the federal budget’s trust funds will be exhausted. Others also argue that the growing economy will create more taxable income and thus more revenue into the social security trust and the year which social security goes bankrupt will be in much further off in the future.