June 2005

Hastert's Social Security Mailer

I found this flyer in my mailbox a few days after Memorial Day. I should make it clear that I do not hold anything against Speaker Hastert. We simply seem to have different opinions about how to handle the Social Security situation, and I would still appreciate the opportunity to share my viewpoints with him in greater detail.

1. During his latest State of the Union Address, President George W. Bush said, “I have a message for every American who is 55 or older: Do not let anyone mislead you; for you, the Social Security system will not change in any way.” By the time such workers are eligible to retire, the retirement age will be 66 years and 0 months per the 1983 Amendments. This means that a person who is 55 today will not start receiving Social Security benefits until the year 2016, or one year before the system is projected to experience deficits. The problem is that these people will not just collect Social Security benefits for one year, but for the rest of their lives. The same politicians who claim that Social Security will be “bankrupt” by 2042 also claim that Social Security will never change for those nearing retirement. However, a person who is 55 today will be turning 92 just about the time that Social Security is predicted to go completely “bankrupt.” Not to mention that the President's proposal will actually take money away from the system, and the benefits paid to retirees will then be dependent upon the government's ability to borrow. The truth of the matter is that any substantial changes to the Social Security system will eventually affect everyone.

2. In my opinion, politicians often overstate the change in demographics. While people are being led to assume that the number of workers per beneficiary experienced a gradual decline and will soon begin to approach dangerous levels, this ratio has actually been stable for almost 40 years (Ratio of Social Security Covered Workers to Beneficiaries). Furthermore, the projected demographic problem should be viewed as a temporary financing challenge that will cease to exist with the passing of the Baby Boom generation. This means that the workers to beneficiary ratio should eventually rebound to a sustainable level.

3. The fine print states, “This mailing was prepared, published, and mailed at taxpayer expense.”