Home> Action Agenda > Social Security > Impact of Privatization

The Impact of Privatization

The privatization of Social Security as proposed by President Bush would have a number of negative consequences.

Privatizing Social Security would cut guaranteed benefits by 40 percent even for workers who don’t choose private accounts. The average retiree would lose $152,000 in retirement benefits. (The Century Foundation, Center on Budget and Policy Priorities, Center for Economic and Policy Research)

The government will wipe out most of the value of the private account. For people who choose private accounts, the government would take back 70 cents in retirement benefits for every $1 in their accounts. That’s on top of the 40 percent benefit cut. (Center on Budget and Policy Priorities)

Privatization would leave many retirees in poverty. Taxpayers and family members would have to provide them with the help that now comes from Social Security’s guaranteed benefits.

Privatization would explode the deficit, saddling our children with $4.9 trillion in debt in the first 20 years alone, mainly borrowed from foreign countries. (Center on Budget and Policy Priorities)

Privatization would open Social Security up to corruption, waste and Enron-ization because politicians would decide which Wall Street firms make billions in inflated fees off our private accounts.

There is time to strengthen Social Security the right way rather than slashing guaranteed retirement benefits. Here are three steps that would help preserve Social Security

First, Congress could pay back the money borrowed from the trust fund.

Second, the “wealthy wage exemption” must be eliminated so CEOs pay the same Social Security taxes on their salaries as we pay on ours.

Third, the Bush tax cuts for the top 1 percent of taxpayers could be repealed.

 

All site content ©2004-5 by Pennsylvania AFL-CIO or others. Tools you may need to get the most out of this Web site.