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Deputy Commissioner Lockhart: Delays in Strengthening Social Security Mean More Difficult Choices in the Future

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Thursday May 15, 2003

Jim Courtney, Press Officer

For Immediate Release

410-965-8904 FAX 410-966-9973

SOCIAL SECURITY

News Release

Deputy Commissioner Lockhart:
Delays in Strengthening Social Security
Mean More Difficult Choices in the Future

James B. Lockhart, the Deputy Commissioner of Social Security, stressed the need to strengthen Social Security in comments to the Fifth Annual Retirement Research Conference at the National Press Club. "The sooner we address the problem, the less abrupt the changes will have to be," said Lockhart.

Lockhart’s presentation showed that Social Security’s current pay-as-you-go system is unsustainable because of the aging of America’s population, and that the tax increases or benefit reductions needed to maintain Social Security’s solvency rise with each year that action is delayed.

To keep Social Security solvent over the next 75 years would require a 15 percent payroll tax increase if action were taken today. Delaying action until 2018 would mean a tax increase of 22 percent, and waiting until 2042 the payroll tax increase would rise to 45 percent above today’s level.

Likewise, to keep Social Security solvent over the next 75 years by reducing benefits would require a 13 percent cut today, but the reduction would increase to 16 percent if action were delayed until 2018, and 31 percent if delayed until 2042.

Lockhart said, "The unattractiveness of relying exclusively on tax increases and benefit reductions to bring Social Security into balance has led some Republicans and Democrats to turn to options like personal accounts that could improve the rate of return on Social Security contributions."

On March 17, upon the release of the 2003 Social Security Trustees Report, President Bush said, "I hope that Members of Congress will join with the Social Security Administration and other interested parties in a national dialogue about how to best strengthen and protect Social Security." Lockhart stressed that the Social Security Administration will work with Members of Congress of both political parties to further bipartisan efforts to strengthen Social Security for future generations.

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