As the debate over Social Security reform heats up, one area of disagreement is whether younger workers should be allowed to voluntarily divert a portion of their payroll taxes into their own personal retirement accounts.
Critics argue that such accounts are too risky; that Social Security should be a sure thing. Advocates explain that Social Security carries its own risks — political risks that will drastically cut benefits in the future if reform isn’t tackled soon.
The reforms President Bush is now proposing came out of the Commission to Strengthen Social Security that he formed in 2001. One of the commission members will be in Portland soon to discuss its findings and to explain why personal retirement accounts should be part of any lasting reform.
Former Minnesota Congressman Tim Penny was a Democrat in Congress from 1982 to 1994. A budget hawk, he worked for lower spending and to cut the federal deficit. He now argues persuasively that “the Social Security status quo is an expensive proposition.”
When asked why we should tackle Social Security reform now, Penny says that “you can pay me now, or pay me later,” meaning that reform may be costly, but waiting will be even more costly as the 80 million baby boomers begin to retire in just three years.
Those who argue that we should do nothing until Social Security goes bankrupt are, in effect, arguing for massive benefit cuts down the road, or massive tax increases, or both. To avoid such drastic options later, we need to listen to thoughtful reformers such as Tim Penny now.
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