Support for President's call for personal retirement accounts

After listening to President Bush accept his party's nomination for a second term, the Chairman of the U.S. Senate Special Committee on Aging praised the President for his comments about Social Security.

"It's clear that President Bush understands that future generations will have a better Social Security program if we allow them to invest a portion of their Social Security tax into a personal retirement account," said Sen. Larry Craig (R-Idaho). "Those currently retired or near retirement won't be impacted by these changes – their benefits will not be affected. But younger Americans and future generations will be better off."

Craig noted that the Special Committee on Aging, which he chairs, has held several hearings on Social Security and the impact that including personal retirement accounts could have.

"After listening to Alan Greenspan at the Federal Reserve and other non-partisan experts in the field over the past several years, it's clear that we have limited options. We can add personal retirement accounts and allow people to build their own nest egg, or we will have to drastically cut benefits or dramatically raise Social Security taxes by up to 50 percent on future generations, or both," Craig said.

Craig said that raising taxes would cut workers’ wages and reduce the number of jobs in the U.S. economy.

In 1950, there were 16 workers to support every person then receiving Social Security. Today, there are only 3.3 workers supporting every Social Security beneficiary. By the time our youngest workers – those just entering the workforce today – turn 65, there will only be 2 workers supporting each beneficiary.

The Social Security payroll tax, which was once 2 percent, is now more than 12 percent. Economists calculate that under the current system, the payroll tax would have to rise over 18 percent if future generations are to receive their scheduled benefits.

“Personal retirement accounts will provide a brighter future for our children and grandchildren,” Craig said.