Every American should have the opportunity for a safe and secure retirement after a lifetime of hard work. Economic conditions are causing older workers to put off retirement plans, retirees are thinking about going back to work, current workers are reducing 401(k) contributions and more are borrowing from their retirement savings to pay for basic necessities.
Today's middle-class families feel the strain of paying for increasing health care costs, mounting college tuition bills, skyrocketing day care fees and higher energy prices. The current economic crisis has highlighted existing weaknesses in the 401(k) retirement savings systememployers face bankruptcy. These realities make saving for retirement an even greater challenge. Many Americans are also facing the alarming prospect of finding their pensions increasingly at risk as large.
We must strengthen retirement security and protect workers' 401(k) plans without adding to the deficit. We also cannot sacrifice the guaranteed benefit of Social Security and Medicare. These enduring programs provide workers with security in their retirement; we must see that they are available not just to us and our parents, but to our children and grandchildren. I will fight to make sure that every American has the opportunity to build and enjoy secure retirement and do everything possible to help middle-class families prepare for a brighter future.
Social Security is one of the most successful programs of the 20th century, and we must preserve this promise for future generations. Social Security has provided workers and their families a guaranteed base of financial security in their retirement years since its inception over 70 years ago. This program is a safety net for retirees, disabled workers and survivors, and it provides guaranteed benefits to workers.
Without Social Security, a majority of American seniors would be facing poverty; with it, 90 percent of seniors are kept out of poverty. Social Security provides the majority of income for 6 out of 10 seniors, and it is the only source of income for 20 percent of elderly Americans. It also provides life and disability insurance.
The importance of Social Security income to seniors cannot be overstated, and I am deeply concerned about the Social Security Administration's announcement that there will be no cost-of-living adjustment (COLA) for 2010 for the first time in decades. Many Michigan seniors have seen their retirement savings shrink and are now struggling to afford their medications and pay their bills. While the Social Security Administration will not be providing a COLA in 2010, I firmly believe that Congress should and must act. I have cosponsored legislation to provide Social Security recipients with a one-time adjusted payment this year, and I am pleased that President Obama has endorsed providing a $250 payment to Social Security recipients in 2010.
In addition to ensuring that Social Security recipients are able to make ends meet in the short term, we currently face the challenge of preserving this essential program for future generations. Though the solvency of Social Security is an important, long-term concern, it does not merit rash, dangerous solutions. Social Security should not be privatized as proposed by President Bush. Had we done this as proposed in 2005, many seniors would've seen their benefits decimated as stocks plummeted as a result of the recent financial crisis. While Social Security does face long-term challenges that need to be addressed, these can be fixed with more sensible changes to the system. According to the nonpartisan Congressional Budget Office (CBO), Social Security can pay all benefits until 2052. We must act to maintain Social Security, but we should not act rashly in a way that would expose too many seniors to a potential major loss in benefits when the market tanks. I will continue to work to ensure that Social Security remains solvent for generations to come.
Like Social Security, Medicare is an essential institution that we must protect. Millions of Americans have had their lives changed for the better because of these initiatives. With large numbers of baby boomers preparing to retire in the next five to ten years, we must work to ensure that Social Security and Medicare remain solvent.
Medicare is critical to providing older Americans with the security knowing that as they age, they can rest assured that they will have access to health care. This is especially true in this tough economy. I am committed to the long-term strength of the Medicare program.
We must reduce waste in the Medicare system. I support efforts to eliminate subsidies to the private insurance Medicare Advantage program. By cutting out the private insurer middle men, we can make Medicare more efficient and get the most patient care for every taxpayer dollar spent.
We also must tackle fundamental health care reform to improve the quality and efficiency of our healthcare system and strengthen Medicare. I supported the Affordable Health Care for America Act (H.R. 3962), which would reduce drug prices for seniors that fall in the "donut hole" of Medicare Part D coverage, eliminate co-pays on preventative care for Medicare recipients, and cover preventative services like diabetes and cancer screenings free of charge. We must work to enhance and strengthen Medicare so that our nation's senior citizens do not need to choose between basic necessities and the health care they need.
Saving for Retirement
Families are struggling to meet their needs, facing rising health care costs, increasingly expensive tuition, skyrocketing day care bills and high energy prices. It is tougher and tougher to adequately save for retirement. At the same time, a number of company pension plans are at risk, making a secure retirement all the more difficult to achieve. In order to minimize these risks, we must begin real pension reform to protect employees and their pensions from CEO corruption and mismanagement. We must prevent companies from unfairly dumping pension plans and make certain that employees receive the benefits they have been promised after a lifetime of hard work.
Effective reforms of the financial industry will provide stability to families' retirement savings. As a member of the House Committee on Financial services, I had the opportunity to help craft H.R. 4173, Wall Street Reform and Consumer Protection Act, which the House passed in December 2009. This legislation will enact the most comprehensive financial reforms since the Great Depression and will protect our retirement and college savings from unnecessary risks and stop pay practices that encourage executives to take excessive risk at the expense of their companies and shareholders.
In addition to pension and Wall Street reform, we also must strengthen the integrity of Social Security. This is why I oppose the GOP plan to privatize Social Security. I strongly support securing social security's long-term stability and solvency. The Republican plan to create private accounts in Social Security would have been disastrous, causing many seniors to see drastic losses as a result of the recent financial crisis.
While protecting Social Security is critical, it is not enough for ensuring that every American has a secure retirement. We need to encourage saving and provide working families with the tools they need to achieve their financial goals for retirement, such as lifetime savings accounts. We could also dramatically increase the number of people investing in 401(k) accounts by encouraging employers to automatically enroll eligible employees into these types of retirement plans unless the employee chooses not to participate. Finally, we must make certain that retirees' individual retirement accounts (IRAs) and 401(k)s are secure.