Halter: Social Security aids Americans
By KEVIN SCHUMM
News Write
Concern for the longevity of Social Security occupies much of current Congressional debate.
"At the heart [of this debate] are demographic issues." said William Halter, the deputy commissioner of Social Security.
Since the advent of Social Security in 1935, two primary characteristics of the population have changed. At that time the number of workers per beneficiary was very high because few people qualified for the program. However, according to Social Security Administration statistics, the number of workers per beneficiary has decreased from five workers per one beneficiary in 1960 to 3.4 workers per beneficiary today.
With projections for 2037 suggesting only two workers per beneficiary, it is estimated that the Social Security expenditures will begin to exceed annual total income in 2022. Twelve years later, in 2034, with the Social Security Trust Fund exhausted, the Social Security Administration predicts that tax revenues will only be able to pay out 71 percent of its benefit obligations.
Another factor complicating the future of Social Security is life expectancy. Not only has the average life expectancy increased from 77 years in 1940 to 82 but Halter also expects "further improvements in life expectancy attributable to a host of developments in medicine and biotechnology."
President Bill Clinton has proposed a three-part plan to help extend the solvency of Social Security. The first part of his strategy entails the use of current Social Security and overall budget surpluses to pay off publicly held debt. By reducing the interest payments on the national debt, this first part of the plan would extend Social Security's solvency to 2050, extending the fund nearly 16 years.
Second, Clinton proposes the option of allowing "a limited and prudent" portion of the above-mentioned savings to invest in broad-based equity indexes. These investments would add another four years, extending solvency to 2054.
The third part heralds a commitment to bipartisan cooperation in Congress to try to extend the solvency of Social Security to 2075.
"As we engage the Congress, a variety of [comprehensive] plans will arise," Halter said. He hopes Congressional involvement will lead to the extension of Social Security for at least the next 75 years.
In order to raise awareness about the issue, Halter and the Social Security Administration's current goal is to advertise the value of Social Security to Americans. The recent advent of the Social Security Statement and an electronic newsletter are two examples of the Administration's innovative new programs targeted to educate America. Requiring only an e-mail address, the electronic newsletter is a quick, one-page summary of current changes and upgrades with respect to Social Security available at the Administration's Web site — www.ssa.gov.
"Social Security is one of the few comprehensive government programs that serves virtually everyone," said Halter. "Whether it be different age groups or ethnicities, we want to provide education [about Social Security and its benefits] to the entire population."
Nearly one in three Social Security beneficiaries are not retirees. In fact, Social Security records show in 1998 about 95,000 students ages 18 and 19 received benefits from Social Security in 1998. Fifty-six percent of those students were the children of deceased workers, with an additional 33 percent being the children of disabled workers. Providing large sums of money to the families of deceased and disabled workers, Social Security is in essence America's family protection plan, according to Halter.
The value of these programs to young Americans is supported by Social Security Administration statistics: out of today's 20-year olds, one out of four can expect to become disabled before reaching age 67. Another equally frightening statistic predicts the death of one out of six 20-year olds before age 67.
The other two-thirds of Social Security's beneficiaries are the more than 30 million Americans currently age 65 or older.
"Huge portions of the population heavily depend on these payments [for sustenance]," said Halter.
Over the last 40 years, Social Security has played a crucial part in reducing the poverty rate among senior citizens from 35 percent to 11 percent. According to Social Security calculations, without such a program, the projected poverty rate among the elderly is nearly 50 percent.
Depending upon the progress of further Congressional action, American families could continue to receive Social Security benefits well into the future, Halter said.
All News Stories for Wednesday, May 3, 2000
