AFSCME/UDW Legislation Fact Sheet

SOCIAL  SECURITY PRIVATIZATION

Background

Home care workers have no retirement or pension plan and therefore must depend on Social Security for their old age. Our current President wants to make sweeping changes to Social Security that you need to be aware of, and fight against.

President Bush talks about Social Security as if the sky is falling! But the facts tell a different story. According to the non-partisan Congressional Budget Office (CBO), Social Security can continue to pay recipients 100 percent of their guaranteed benefits for the next 47 years (until 2052) even if Congress makes no changes to the current program.

Social Security is NEVER going to go broke. Even after 2052, CBO says Social Security will be able to pay 80 percent of guaranteed benefits, which would be more money than most recipients would get if they put their payroll contributions into private accounts. The challenge is to strengthen Social Security so it can continue to pay 100 percent of benefits far into the future. But radical changes such as privatization, raising the retirement age or drastic benefit cuts aren't the answer. The Bush privatization plan would worsen the financial health of the program by making the projected gap in funding deeper and begin sooner. Funding private accounts for younger workers while, at the same time, paying benefits to current retirees will cost the Social Security Trust Funds trillions of dollars on top of what's needed to correct the future shortfall. If Bush's plan is adopted, Social Security would start to show a shortfall in 2032 - at least 20 years sooner than CBO currently projects.

Summary of Legislation

Decreases or loss of Social Security would hit low income retirees like home care workers particularly hard.

How It Would Work and What Workers Could Expect to Get After Retirement: the Bush plan is so costly it would push the federal government even deeper into debt. Because privatization would cost trillions over the next 60 years, it could create so much debt that, for decades, no money will be available to take on serious domestic issues, such as health care and education.

Privatization means benefit cuts: the government will take back 70 cents in benefits for every dollar in a worker's private account. This “clawback” would leave the average worker with a very small benefit. Under the current Social Security program, the government sends each beneficiary a guaranteed monthly check until the day they die and doesn't take back any of that money.

The Bush plan would make huge benefit cuts in addition to the clawback. All workers, even those who don't opt for private accounts, would see their benefits cut by 30 percent — $152,000 over the course of an average retirement. For those who do choose an account, the clawback plus these additional cuts would reduce benefits by 50 percent.

Privatization would open up Social Security to corruption, waste and Enron-ization. Politicians could award contracts to their favorite Wall Street firms, who could make billions in fees for managing workers' private accounts. The fees would be deducted directly from the accounts, reducing workers' investment returns.

Young workers could find themselves destitute in retirement. Those who choose to open private accounts will be sacrificing their guaranteed benefits. If the stock market tanks and their private accounts are decimated as they near retirement, they will have nothing to fall back on.

AFSCME Position

Social Security must be strengthened to meet future obligations, but we need to take the time to do it right. Let’s help, not hurt working families by saying “No” to Social Security Privatization.

WHAT YOU CAN DO

Call or write your Senators and Representative and tell them that you strongly oppose the privatization of Social Security.

To find names and contact information for all your elected officials, including the president, members of Congress, governors, state legislators, and more, click the link below then scroll to bottom of page where it says "Look up Elected Officials" and enter your zip code: AFSCME's legislator search

The above page also has a "Congressional Scorecard" feature for looking up your elected representatives record on important issues, and "View Candidates for Office" so that you can research candidates before you vote.

AFSCME Department of Legislation