The following is from an editorial by Richard Parsons, the current Chairman and CEO of Time Warner, and a co-chair of President Bush's Commission to Strengthen Social Security: Chicago Tribune A real opportunity to fix Social Security: "If you look at any major newspaper today, you're likely to read conflicting views on what the future holds for Social Security. As my commission co-chair, the late Daniel Patrick Moynihan, put it, 'You're entitled to your own opinion. You are not entitled to your own set of facts.'
So let's look at the facts. In 1950, there were 16 workers supporting every retiree in Social Security's pay-as-you-go financing system. That meant taxes were relatively low.
Today, there are roughly three workers supporting each retiree, thus a higher tax burden per worker. By 2030, there will be only two workers for each retiree. This downward trend in the ratio of workers to retirees will inexorably require painful tax increases or significant benefit cuts or astronomical levels of borrowing. In a worst-case scenario, it might require all three.
Looking this problem squarely in the eye--something politicians have been reluctant to do for decades--Bush has put a bold plan on the table.
His reform proposal would ensure that benefits for low-income workers, those who depend on Social Security the most, would grow faster than benefits for people who are better off. By most accounts, this reform would solve 70 percent of the funding deficit facing Social Security.
At the same time, the president believes, and I agree, that giving workers the voluntary choice of investing in a personal retirement account--in addition to patching that hole in the Social Security safety net--will provide millions of current and future workers with the nest eggs they'll need to live in comfort once they retire.
Pat Moynihan and I agreed that this is not a debate about the success of the current Social Security system. Few would disagree that it has been a reliable source of income for 70 years that has virtually eliminated poverty among the elderly. Rather, this is a debate about how to structure a system that is fair and makes sense to today's young people.
If you asked Americans under 40 today what kind of public pension system they would create if we were starting from scratch, an overwhelming majority of them would tell you that a personal retirement account should figure prominently in the new system. Sadly, the voices of these younger Americans are not well represented in the debate today because there is no well-heeled interest group speaking for them.
Bush understands that personal retirement accounts are not a magical solution to all the fiscal woes facing Social Security. But by coupling that choice with a real plan to put the system's solvency on solid footing, I believe he has given us the first real chance in decades to say to current and future retirees, "The benefits you have been promised will be there when you need them."
The late Sen. Moynihan was both a loyal Democrat and a tried-and-true realist who recognized that there were problems that no one party could solve. He believed that by acting together and by favoring facts over theories, we could fix Social Security before it was beset by crisis. We need that same faith today."