Senator Richard C. Shelby

Since its creation in 1935, Social Security has provided essential and guaranteed income to America's seniors. I believe it is important for the government to continue this commitment, without increasing payroll taxes or decreasing benefits.

I also believe that we must look at long-term reform of the program in order to ensure this commitment. When Social Security was created, there were about forty workers paying Social Security taxes for every person receiving benefits. Today, there are about three workers for every beneficiary. Furthermore, Social Security was created at a time when the average life expectancy was 61.7 years. Average life expectancy today is approaching 77 years. These changing conditions have created a situation where Social Security benefits paid out will exceed payroll taxes collected in 2015 and the program will be insolvent in the absence of reform by 2038.

Given the low savings rate in our country and the fact that Social Security is the sole source of income for many seniors, Social Security must be reformed so as to guarantee its continued existence. Last Year, President Bush formed The Commission to Strengthen Social Security. This bipartisan commission was given the task of developing a plan to reform Social Security and ensure its solvency for generations to come. The Commission issued its Final Report on December 21, 2001. The report offered three options to reform Social Security. Each plan approached reform from a different direction, but each relied heavily on the idea of personal retirement accounts. The Final Report can be viewed at: www.csss.gov.

Opponents of personal retirement accounts argue that allowing people to invest a portion of their payroll taxes is risky. Certainly, there is some risk in any investment. However, risk does not stop retirement planners from advising people to contribute to IRAs and invest in mutual funds, stocks, and bonds. Currently, Social Security recipients average a return of 1.2% on their payroll taxes. I believe it is completely unjust for the government to force workers into such a low-return investment. The stock market has its ebbs and flows but overall returns are far greater than those offered by Social Security. Workers should be able to decide where a portion of their payroll taxes are invested.

Social Security reform is a complex issue that must be confronted by Congress. I am convinced that personal retirement accounts are essential to the continued success of Social Security. I believe that financial decisions regarding retirement planning are inherently personal and should be made by the individual, not the government.

Date Title

05/13/05 SHELBY ANNOUNCES 2005 COPS GRANT APPLICATIONS ARE AVAILABLE
03/16/05 SHELBY: WE MUST BALANCE THE BUDGET

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