|This is an archival or historical document and may not reflect current policies or procedures|
Monday March 17, 2003
Jim Courtney, Press Officer
For Immediate Release
410-965-8904 FAX 410-966-9973
Social Security Not Sustainable for the Long Term
The Social Security Board of Trustees today declared that the Social Security program is not sustainable over the long term. The 2003 Social Security Trustees Report does extend the projected solvency of the trust funds by one year.
In the 2003 Annual Report to Congress, the Trustees announced:
"This report is yet another reminder of what we have known for some time: Social Security's long-term financing problems are very serious, and will not be fixed by wishful thinking alone," said Jo Anne Barnhart, Commissioner of Social Security.
"I want to assure those already receiving Social Security benefits – as well as those who are close to retirement – that your benefits are secure. But doing nothing will have serious consequences for our children and grandchildren.
"The release of this report is a good time to remind people how the Social Security program works. Social Security taxes pay the benefits of today's retirees. Money in excess of what is needed to pay today's benefits is invested in special issue, interest-bearing Treasury bonds. This system works well when there is a relatively high ratio of workers to beneficiaries. For instance, in 1965, there were 4 workers for every Social Security recipient.
"But the demographics are changing. People are living longer. The first baby boomers are just five years from retirement and the birth rate is low. Today, there are 3.3 workers paying Social Security payroll taxes for every one person collecting Social Security benefits. That number will drop to 2 to 1 in less than 40 years. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates.
"As stated in the Trustees Report, the sooner we address the problem, the less abrupt the changes will have to be.
"Earlier today, Secretary Snow and I met with the President. We share the President’s strong hope that the national debate about Social Security will lead to a bipartisan solution.
"Social Security’s retirement, disability and survivors’ components touch the lives of nearly every American family. For the sake of our children and grandchildren, we must come together to meet the challenges facing this vitally important program."
Other highlights of the Trustees Report include:
The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: John W. Snow, Secretary of the Treasury and Managing Trustee; Jo Anne Barnhart, Commissioner of Social Security; Tommy G. Thompson, Secretary of Health and Human Services; and Elaine L. Chao, Secretary of Labor. The other two members, appointed by the President and confirmed by the Senate, are John L. Palmer and Thomas R. Saving.
The 2003 Trustees Report will be posted at www.socialsecurity.gov/OACT/TR/TR03 by Monday evening.
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