Social Security

Social Security:: International Trade:: Healthcare/ Wealthfare Reform:: Tax Reform

Ever since Social Security was enacted in 1935, American workers have had a different outlook on their retirement. However, Social Security has become a major concern throughout the years due to an aging population. The solvency of the program is in question. As the Ranking Democratic member of the Ways and Means Subcommittee on Social Security, Robert Matsui was one of the nation's most passionate advocates to save the program and to fight against the privatization of Social Security Funds.

The Social Security Program, which began as a program that provided continuing income during retirement, gradually expanded to cover disabled workers, spouses, and dependents as well. This program gives workers who pay into it entitlement to benefits regardless of economic need and provides benefits to replace income lost due to death, disability or retirement. It was also designed to achieve certain social goals such as reducing poverty and providing progressive benefits and also enhance pensions and personal savings with a minimum floor of income.

Right now about 47.7 million people are benefitting from this program. The Social Security payroll tax is 12.4 percent of wages up to $90,000, divided equally between employers and employees. Workers are entitled to benefits after paying into the system for a certain amount of time, usually 10 years.

The problem with social security is that it is not a savings plan and the payroll taxes paid by each worker are not set aside to finance that worker's retirement. Instead, Social Security is financed on a pay-as-you-go basis, a social contract between the workers and retired workers of today. The payroll taxes paid by today's workers are used to pay benefits for today's retirees and future workers will pay for future retirees.

The program is in trouble because the number of workers per benficiary is decreasing. Women are having fewer children, and people are living longer. A pay-as-you-go system does not work well when the population is aging, because the program's revenue cannot keep up with its growing costs. Without reform, Social Security is not sustainable in the long run. Even the surpluses today would run out in the future and all the burden will be on the workers of tomorrow.

Since Matsui also served on the Social Security Subcommittee in 1983, the last time the program faced major changes, he was a veteran with Social Security Reform. Many truly believed that a general was lost in the battle for Social Security when he passed away.

Critics of Social Security believe that privatization strengthens Social Security. Matsui, however, argued that privatization propenents do not support private accounts in addition to Social Security, but instead support private accounts instead of Social Security. And replacing Social Security with private accounts significantly worsens is, corrupting the foundation of the system and jeopardizing guaranteed retirement benefits for seniors, disabled workers, and survivors.

President Bush came up with a plan in 2001 in which one-third of a worker's contributions to Social Security would be diverted from the trust funds into private accounts. As a result of this plan, the trust funds would lose almost $2 trillion in the first 10 years alone. This diversion weakens the trust funds so significantly that the date by which they are no longer able to pay full benefits is moved up by more than two decades.

Robert Matsui was determined to revise Social Security incrementally to ensure its long term solvency without compromising its fundamental purpose, which was to reduce or eliminate poverty among America's elderly, persons with disabilities, and surviving dependents. He believed that all of these groups are entitled to the certainty and stability of a guaranteed income that allows them to live with dignity.