Social Security Desperately Needs Reform
November 18, 2003
Unfunded Liability Threatens All Other Government Activities, Says NCPA
November 18, 2003 – The National Center for Policy Analysis (NCPA), one of the nation’s leading think tanks on entitlement issues, has warned that if Social Security is not reformed soon its unfunded liability will threaten the government’s ability to do anything else.
“Sen. Lindsey Graham should be praised for moving the Social Security debate forward. This is arguably our nation’s single most important domestic policy issue,” said NCPA Senior Policy Analyst Matt Moore. “If Social Security is not responsibly reformed soon, the government will be unable to afford most any other project.”
According to a recent NCPA study, Social Security and Medicare are already promising $50 trillion more in benefits than they can afford to pay.
- In 2008 payroll tax collections will no longer be enough to pay all the Social Security and Medicare benefits people have been promised.
- By 2013, just ten years from today, the federal government will have to redirect 5 percent of all federal income taxes — about $100 million — to Social Security and Medicare to pay full benefits in that year.
- By 2040, nearly half of the entire federal budget will have to go to Social Security and Medicare. And the costs continue to grow.
What does that mean for the average worker? If you are 30 years old, for example, you’re going to pay 27.3 percent of your income for Social Security and Medicare in the year before you retire — a 56 percent increase from today. A 20-year-old will pay 29.2 percent in the year before they retire. A newborn will pay 35 percent — more than a third of his income — just for Social Security and Medicare.
While Social Security reform is important to all Americans, it is especially important to minorities.
“Blacks, on average, pay far more in Social Security taxes than they can ever expect to receive in benefits,” said National Black Chamber of Commerce President Harry Alford. “Using personal retirement accounts to reform Social Security will allow not only blacks, but all Americans, to save for a better retirement and also provide an asset to pass on to heirs.”
The National Center for Policy Analysis has partnered with the NBCC to expand Team NCPA — the national all-volunteer Social Security education network — to reach into the black community to educate them about the need for Social Security reform.