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The impact of Social Security privatization on young adults

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Washington, D.C. – Two new studies highlight the impact on young adults of George W. Bush’s partial-privatization plan, which would require substantial cuts in Social Security benefits, such as raising the retirement age and reducing Social Security disability and survivors insurance payments.

In order for workers to invest a portion of their Social Security taxes, Bush would divert at least $1 trillion out of Social Security over the next ten years – a severe shortfall that, experts say, would lead to cuts in Social Security benefits. Governor Bush has not specified any source of funding to offset this $1 trillion shortfall.

Raising the Retirement Age: The Wrong Direction for Social Security, by EPI economist Christian Weller, shows that if cuts to Social Security were achieved by raising the retirement age — which Bush specifically has not ruled out — then today’s 33-year-olds would work until they were nearly 74 before collecting full benefits. The report also finds that those who rely most on Social Security would suffer most if the retirement age rises.

Young Social Security Beneficiaries in the Fifty States, by 2030 Action Director Hans Riemer, shows that 4.3 million Americans under age 40 receive Social Security checks each month, largely through Social Security’s disability and survivors insurance programs. The report argues that the shortfall in Social Security funds caused by the Bush privatization approach would lead to significant cuts in disability and survivors benefits. A different report is also available for each state.

This event was recorded on Monday, October 2, 2000 at the National Press Club.