For Release: May 19, 2000
Contact: David Almasi at 202/543-4110 or [email protected]
Black Network Demands Social Security Reform Bipartisan Support for Private Investment of Payroll Taxes Applauded
48% of young Americans believe they will see a UFO but only 28% believe they will see a Social Security check when they retire.
Reforming America's retirement security plan must be a top national priority. Members of the African-American leadership network Project 21 are pleased with the bipartisan progress now underway toward privatizing Social Security and making it fair for black Americans.
As the baby boom generation ages, the increasing strain on Social Security may plunge the government plan into bankruptcy and strand countless older Americans. A recent Federal Reserve study found 56% of households are not putting away enough for a comfortable retirement. Three-quarters of poor families with incomes of $25,000 a year or less also indicate they are not prepared for retirement. Social Security will probably only return a one to three percent on the investment young Americans are putting into it - a rate worse than an average bank account.
Black Americans are the most at risk under the current Social Security regime. A recent survey found only 28% of black households have enough saved for even the most minimal retirement comfort. Furthermore, since black men have a lower average life expectancy than the rest of the population, they are less likely to get back what they have paid into Social Security. Because benefits are not transferable, their families will receive nothing when a black male head of household dies.
Social Security reform is now receiving strong bipartisan support, and may become a major issue in this fall's presidential election. Presumed Republican presidential candidate Governor George W. Bush of Texas announced a proposal this week to let workers invest a portion of their payroll taxes rather than having the government make all the choices. The proposal would keep current benefits intact for those now receiving Social Security and not raise payroll taxes. Bush is the first nominee to suggest privatizing Social Security since Barry Goldwater in 1964.
In the Senate, Democratic senator Bob Kerry of Nebraska and Republican Judd Gregg of New Hampshire introduced legislation to allow workers to invest two percent of their payroll taxes in privately controlled investment plans. Other key Democrats supporting this legislation are Daniel Patrick Moynihan of New York, John Breaux of Louisiana and Chuck Robb of Virginia. Presumed Democratic presidential nominee Vice President Al Gore, however, opposes reforming Social Security.
"Working Americans earning $35,000 a year will be taxed more than $350,000 by the federal government by the time they retire. They will receive an average of only $1,200 a month or less in Social Security benefits - a certain fate of old-age poverty. It is insulting to be told we should not be allowed to voluntarily control a portion of our own retirement investment when the government's return is only a few percent over 30 to 40 years. I can take the investment advice of a five-year-old finger-painter and do better on a long-term investment that the government has done on Social Security," said Project 21 associate Mike Green. "It seems that some people are content to allow the government to control and oppress as long as someone with an important title frightens them into thinking freedom is a bad thing - a tactic similar to how the slavemasters used to keep slaves from leaving the plantations of the old south."
Project 21 has been a leading voice of the African-American community since 1992. For more information, contact David Almasi at (202) 543-4110 or [email protected], or visit Project 21's website at http://www.project21.org/P21Index.html.
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