Statement of Charles G. Hardin, President, Council for Government Reform, Arlington, Virginia
Mr. Chairman, My name is Charles G. Hardin and I am President of the Council for Government Reform (CGR). CGR is a grassroots advocacy organization of over 500,000 supporters seeking responsible and limited government. We have a long history of supporting the addition of personal retirement accounts as the most responsible way to reform Social Security, but we realize major reform cannot take place until a number of concerns are addressed. The measures under consideration today pave the way for major reform by focusing attention on the special needs of current retirees, women, and current workers. They also have the added bonus of giving today’s workers information that will help them make better plans for retirement security.
Benefit Guarantee Proposals
Several legislators have introduced bills that would guarantee Social Security retirement benefits to those currently receiving those benefits and to new retirees as they turn 65. Likewise, the President’s Commission to Strengthen Social Security offered several proposals that could be implemented with or without legislative activity.
Over the last several years, CGR has collected almost 2 million petitions from grassroots activists calling for, among other things, an ironclad promise that retirement benefits be backed by the full faith and credit of the U.S. government. While CGR and its members recognize the importance of fundamental Social Security reform, we also realize the necessity of addressing the legitimate concerns of current recipients who may be frightened about losing their benefits.
We support proposals that will conclusively address these fears and congratulate the Social Security Subcommittee for recognizing the need to address seniors’ concerns before proceeding to the larger tasks ahead.
Women and Social Security Retirement
The role of women in society has changed since Social Security was enacted in 1935. At the time, it was assumed that a woman would not work and her benefit computations were based upon her husband’s lifetime earnings. While the number of working women has increased dramatically in the last several decades, women are still disproportionately dependent on Social Security in retirement. Roughly 15 percent of women retire poor. Poverty rates are even higher for minority women: 29 percent of black women and 28 percent of Hispanic women retire in poverty. Twice as many women as men retire in poverty and women receive only 75 cents in Social Security benefits to men's one dollar.
Personal Retirement Accounts will allow women to own and control their own retirement, and is therefore the most pro-woman reform that can be enacted. I applaud the subcommittee’s examination of this difficult issue.
“Right-to-Know” Legislation
For a majority of the 123 million American workers who receive it, the annual Your Social Security Statement (YSSS) is the sole source of official information they will receive regarding retirement benefits. Unfortunately, these statements downplay or omit important information about those benefits. They include an accounting of Social Security taxes the individual worker has paid to date, the worker's eligibility for benefits, and an estimate of the various types of benefits the worker and/or family could receive under different circumstances; but while workers are told that they will receive a specific dollar amount from Social Security, they are not told that the money may not be there for them. Nor are they given any idea of the rate of return on their taxes (which for some constitutes an absolute loss).
CGR believes American workers should be told the truth about Social Security's financial future and its impact on the retirement benefits they expect to receive. As taxpayers, they should have a right to this information, which can be provided by the Social Security Administration at little or no cost. The additional information provided pursuant to H.R. 634, S. 354, and similar bills would go a long way toward enhancing the quality of the Social Security debate and enabling Americans to plan more realistically for their retirement years.
Conclusion
The Subcommittee is considering three measures, each of which is important in its own right. The proposals also will move the larger debate on Social Security reform in the right direction. Mr. Chairman, the Council for Government Reform applauds your convening this hearing. We support the Subcommittee in its work and we stand ready to assist in whatever way possible. Thank you.