Congressman Hensarling Discusses Social Security with Lakewood Kiwanis Club

Congressman Hensarling Discusses Social Security with Lakewood Kiwanis Club
July 7, 2005

DALLAS - U.S. Congressman Jeb Hensarling (TX-5) addressed the Lakewood Kiwanis Club on Thursday, July 7, 2005, to discuss the problems facing Social Security and the need to strengthen the program for future retirees.

"Every American should have the right to enjoy a safe and secure retirement," said Congressman Hensarling. "Clearly, there is absolutely no need to change Social Security for current and near retirees. They can and should be able to count on 100 percent of the benefits they have earned over their lifetimes of hard work. But serious problems are on the horizon for future generations of retirees. If we do not act soon, the Social Security system as we know it will not be around for our children and grandchildren."

In 1935, when Social Security was created, there were about 40 workers supporting every one retiree. By 1950, that number dropped to 16 workers per retiree. Today, there are only three workers for every one Social Security beneficiary. In 2008, the "baby boom" generation will begin to retire. In just over a decade, the system will begin to go bankrupt, paying out more in Social Security benefits than it collects in payroll taxes.

Not only will there be more people receiving benefits than ever before, they will be receiving them over longer periods of time, because Americans are living longer. When Social Security was conceived in the mid-1930's the average life expectancy at birth in the United States was 60. Today, the average American life expectancy is 77.

In addition to this demographic time bomb, Hensarling says Americans face another major obstacle in keeping the Social Security system solvent. "Washington has raided the Social Security Trust Fund nearly 50 different times," Hensarling explained. "But the money isn't going to protect retirees. It is going to pay for things like the $50 million indoor rain forest in Iowa or the $700,000 outhouse in Pennsylvania that doesn't work. Politicians have simply done a terrible job managing American's retirement security."

Today, the Social Security system faces a shortfall of $10.4 trillion. Each and every year the problem is ignored will cost the American people an additional $600 billion, or close to $2,000 for every man, women and child in America. Without significant changes, under the current system, today's younger workers will face a 30 percent benefit cut or a 43 percent tax increase by the time they reach retirement age.

"As an American taxpayer, and the father of two small children, both of these scenarios are simply unacceptable," said Hensarling. "It would be easy for anyone to ignore the future problems facing Social Security, but if we want our children and grandchildren to enjoy the same retirement security that our seniors do today, we must take an honest look at the figures and the facts."

Hensarling and other Members of Congress have taken a huge step forward in their efforts to save Social Security for future generations by introducing the Growing Real Ownership for Workers (GROW) plan. "The GROW plan would ensure that the remaining surpluses in the Social Security Trust Fund are actually dedicated to Social Security," said Hensarling. "It will save the surplus from the big spenders in Washington who have historically taken that money and spent it on big government."

Under the GROW plan, Social Security surpluses would be dedicated to personal GROW accounts, where money would be invested in government-guaranteed Treasury securities. These accounts would contain real assets that workers own and the government cannot take away. GROW accounts would be created for workers under the age of 55, but no worker would be required to participate. "There would be no change at all to the system for those over 55," Hensarling explained. Upon retirement, account balances will be used to help pay the worker's Social Security benefit. "Best of all," he said, "these accounts would be inheritable, so workers could pass their retirement savings on to their spouse or children after they are gone."

Hensarling closed by saying Social Security should not be a partisan issue. "Folks in Washington need to look beyond the next election and focus on the next generation. If we work together, Republicans and Democrats can protect Social Security for today's retirees and preserve it for future generations of American workers."

http://www.house.gov/apps/list/press/tx05_hensarling/070705APR.html