WICKER IMPRESSED WITH BUSH SOCIAL SECURITY VISIT TO STATE
Canton, Mississippi, was in the national spotlight last week when President George Bush visited the Nissan automobile manufacturing plant to promote his efforts to ensure the long-term solvency of the Social Security System.
The President's travels are always headline news, and his stop in Mississippi provided an opportunity for the world to see the success we have had in attracting world-class manufacturing. Mr. Bush called the Nissan plant an amazing facility and congratulated the "dreamers and doers" for making it a reality. He said thanked Nissan workers for showing the world that America can compete with anybody.
In addition to the Nissan stop, Mr. Bush also visited with members of the military and their families at the Air National Guard facility in Jackson. I was a member of the president's party and was impressed to see him take so much time to interact with many of the 400 people gathered at the airport.
FOCUS ON SOCIAL SECURITY
The focus of the President's trip was to talk about Social Security and press for reforms that would ensure that the program is strong for decades to come. He noted that under present conditions, the Social Security system will begin running a deficit in 2017 and will be bankrupt in 2041. "You do nothing and you're guaranteeing a massive tax hike or a massive benefit cut," he said. Mr. Bush projected that the current 12.4 percent payroll tax might have to be raised to 18 percent unless corrective action is taken.
One important point to stress in any discussion of Social Security reform is that current retirees would not be affected. The President expressed that reassurance more than once during his remarks. "You are going to keep getting your check...I don't care what the propagandists say. I don't care what the politicians say. Nobody is going to take your check away," he said.
SYSTEM IN TROUBLE
When the Baby Boomer generation soon begins to retire, the Social Security rolls will rise from 40 million people today to more than 70 million. In 1950, there were 16 workers to pay for the benefits of one retiree. Today that number is down to 3.3 workers paying for one retiree, and it will soon drop to two workers per retiree. He correctly noted that the current system cannot be sustained.
Another factor causing financial strain on the system is that benefits have been growing faster than the rate of inflation each year. Mr. Bush has proposed to tie benefits for upper income Americans to inflation while leaving the current higher cost of living rate intact for lower income retirees.
PERSONAL ACCOUNTS A GOOD IDEA
Another key component in this discussion is a voluntary plan that would allow younger workers to put a portion of their payroll taxes into a personal savings account. The accounts would be owned and controlled by taxpayers, not the government. The accounts offer the opportunity to build individual wealth at much greater returns than the present system. The funds amassed in these accounts could also be passed along to a retiree's heirs. I share the President's enthusiasm for personal accounts because of the potential they have to earn more money for future retirees.
It was good to have Mr. Bush back in Mississippi again. I also appreciate that he continues to make the point that action on Social Security is needed sooner rather than later. I hope we can continue that dialogue and advance this issue on Capitol Hill in the coming days.