Masonry Magazine June 2005 Page. 10
Government Affairs
Reform Key to
Strengthening Social
Security
John W. Snow
Secretary, U.S. Department of the Treasury
Social Security remains on an unsus-
tainable course, requiring prompt, respon-
sible and bipartisan action to fix the pro-
gram for our children and grandchildren.
The government has made promises it
cannot afford to keep under the current
"pay-as-you-go" system, and President
Bush is leading administration-wide
efforts to strengthen and save the 70-year-
old program for future generations.
America's changing demographics are
at the heart of the system's pending insol-
vency. It used to be that 16 workers paid
taxes to support one retiree, but that ratio
has dropped to nearly 3-to-1 today and will
be 2-to-1 by the time today's young work-
ers retire. By 2017, Social Security will be
paying out more in benefits than it takes in.
By 2041-when younger workers begin to
retire-the system will be bankrupt.
President Bush has laid out principles
for reform-such as not changing benefits
for those Americans 55 or older, not
increasing the payroll tax rate and the cre
ation of voluntary personal accounts so
that younger workers can build a nest egg
-but he has also asked that the American
Social Security Cash Flows, 2005-2079
(billions of real dollars, 2005 Trustees Report)
2008: Peak $90 billion
2017: Cash-Flow Crossover
2041: -$358 billion,
Year of Trust
Fund Exhaustion
2079:-$785 billion
people have dialogue, and that the Con-
gress bring forward a variety of proposals.
That dialogue is occurring and those pro-
posals are coming forth, so great progress
is being made toward a more specific plan
to save and strengthen the system.
Voluntary personal retirement
accounts are a key component of
reform. Personal accounts would
replace the empty promises of the
current system with real assets of
ownership. A young person who earns
an average of $35,000 a year over his
or her career would have nearly a
quarter million dollars saved in his or
her own account upon retirement.
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