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Pallone Listens to Seniors About Social Security Privatization Proposal at Town Hall Forum

February 22, 2005
Press Release

Smithville, NJ --- U.S. Rep. Frank Pallone, Jr. (D-NJ) today holds a town hall forum with senior citizens at the Four Seasons at Historic Smithville to listen to their opinions about President Bush's general proposal to partially privatize Social Security. The New Jersey congressman's visit with seniors is part of a daylong Social Security listening tour throughout the state. Pallone made the following introductory comments before listening to the seniors' thoughts and concerns.

"As you all know, Social Security is an American success story that safeguards independence and economic security for our nation's seniors. Since President Franklin D. Roosevelt signed Social Security into law in 1934, it has improved the lives of millions of seniors.

"The president has said Social Security faces a financial crisis today, and claims the entire program will be broke in 2042. That's a flat out lie. Social Security faces a challenge, not a crisis. The program is actually fully solvent until 2052, according to the most recent estimates, and rather than going broke at that time, as the president suggests, Social Security will still be able to pay 70 to 80 percent of its benefits. The president also neglects to tell you that his proposal does not extend the solvency of Social Security beyond 2052. Rather, the president's plan worsens the situation by moving solvency even closer, to 2031.

"President Bush tells seniors they need not worry about his Social Security privatization plan because it won't affect anyone over the age of 55. He's not being straightforward with you. The president's Social Security privatization plan will hurt everyone, including today's beneficiaries.

"Since privatization diverts two-thirds of the employee-paid Social Security tax away from the program and into private accounts, Social Security's financial status is worsened and benefits for every retiree and those with disabilities are threatened. In order to continue paying benefits for today's retirees, privatization plans must borrow trillions of dollars over the next couple of decades, sending our already record deficit even higher, which could lead some in Washington to consider cuts to Social Security.

"The president says his Social Security privatization proposal will help your children and grandchildren build a larger nest egg for their own retirement. In fact, his privatization plan negatively affects your grandchildren the most. Consider that a 20-year-old entering the workforce this year would lose $152,000 in Social Security thanks to the more than 40-percent benefit cut needed to pay for the private accounts. A private account is unlikely to make up for this benefit cut because the plan also takes back 80 cents for every dollar in the private account through a 'privatization tax.'

"The president is trying to scare younger workers about Social Security's solvency in order to destroy America's safest source of retirement income. Younger Americans are under the misconception that Social Security will not be there when they retire, but, as I've already explained, the numbers show otherwise. You all need to serve as an ambassador of the program, and educate your children and grandchildren on the security this program provides you today. It can be there for them tomorrow if we reject the president's risky Social Security proposal.

"I oppose all efforts to privatize Social Security. If the president really wanted to strengthen Social Security's future, he'd create a bipartisan commission to explore ways to extend solvency beyond 2052. That's what President Reagan did in 1983 when Social Security was in a real crisis, and he and Democratic House Speaker Tip O'Neil strengthened the program for seventy years."

"I'd like to thank you all for coming this morning. Now I'd like to hear from you."