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Committee on Ways and Means
Subcommittee on Social Security
For Immediate Release
Contact: Press Office 202-225-8933
October 9, 2002
Actions Speak Louder than “Pledges”
Democrats’ Pledge-but-no-Plan Approach
is Irresponsible, Shaw says
WASHINGTON -- Efforts to pressure Members of Congress to sign a
pledge not to “privatize” Social Security are clearly just another form
of Democrats’ scare tactics, since neither the President’s Commission’s
options or any Republican legislation would “privatize” the program.
“Here we go again, Democrats are pushing the same old line on Social
Security. Serious legislators should put aside political ploys and
instead put forth their plan to strengthen Social Security,” said Ways
and Means Social Security Subcommittee Chairman, Rep. E. Clay Shaw.
“The Democrats’ pledge-but-no-plan approach is irresponsible and
would leave only a legacy of debt and broken promises to our kids and
grandkids- we can and must do better than that,” Shaw added.
Consequences of the Democrats’ “no-plan” approach include:
Payroll taxes for an average earner (earning about
$35,000 in 2002) would soar from about $4,300/year to about
$6,600/year (over 50% increase), far too high a burden for our
children and grandchildren;
Or, promised retirement benefits of 23-year olds would be cut by
over 1/4, and their children would face benefit cuts of 1/3;
Or, national debt would balloon by $270 billion in 2041, $4.4
trillion in 2050 and $33 trillion in 2076.
We would not be able to improve benefits for women, even though
women are disproportionately dependent on Social Security for
retirement income and more likely than men to suffer poverty in old
age, especially widowed, divorced, and never-married women.
We would not be able to help African-Americans and Hispanic
Americans to build wealth they could pass on to their heirs, even
though they have less savings and pension coverage than average.
African-American households own only $3,060 in financial assets and
Hispanics households own only $1,200. In contrast the median U.S.
household owned $17,400 of financial assets
Workers would be denied the opportunity to choose ownership and
control of personal accounts, which would back Social Security
benefits with real assets instead of IOUs, which could be passed to
heirs, and which no politician could take away.
Last December, the House overwhelmingly approved (415-5) H. Con.
Res. 282, a resolution calling on the President and the Congress to
develop legislation to strengthen Social Security as soon as possible
and to guarantee current law promised benefits without increasing
taxes. Members are on record.
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