Sometime after George W. Bush takes office, the debate over Social Security choice will move to center stage in the world of politics. When that happens, opponents of Social Security choice will talk a lot about how risky it is to let workers invest for their own retirement.
That’s a good argument for opponents of reform to make because any type of investment has some level of risk involved.
However, those who want to reform Social Security also have a good argument to make — there’s risk in relying on the federal government to provide Social Security benefits for today’s workers.
In fact, 46 percent of American adults say that relying on the government is riskier than letting workers invest for their own retirement. Just 36 percent say letting workers invest is more risky, while 18 percent are not sure.
In other words, people know that there is risk involved when workers invest for their own retirement. For many, however, that’s a smaller risk than maintaining the status quo.
Another argument you’ll hear is that we need to protect Social Security by building up the federal surplus. This builds upon the undeniable fact that most Americans think Social Security needs protecting. It’s also true that this is a higher priority for most than cutting taxes or other proposals favored by conservatives.
However, it’s important to explore the question of how best to protect Social Security. To many politicians, the answer is that we must send more money to Washington. Most Americans, however, have a different idea. In fact, 52 percent of American adults also say that letting workers opt out of Social Security and provide for their own retirement will do more to protect the future of Social Security than having the government collect more money in the Social Security Trust Fund. Only 29 percent think building up the Trust Fund will do more for the long-term solvency of the New Deal’s most popular program.
So, those who want to reform Social Security must acknowledge the public desire to protect this program and then focus on how best to accomplish that goal. Reformers must recognize, however, that there are huge demographic differences based upon age and employment status. For example, private sector workers say it is riskier to rely upon the federal government by a margin of 51 percent to 33 percent. Government employees are divided, with 44 percent saying relying on the government is riskier and 41 percent say the greater risk is letting workers invest. Retirees are split as well, with 39 percent saying the greatest risk is relying upon the government and 38 percent say it’s letting workers invest.
These generational differences can be seen on many other issues surrounding the Social Security debate. Overall, just 36 percent of Americans say that Social Security is a good deal for today’s workers, while 40 percent disagree. The differences on this question are huge. By a 55 percent to 20 percent margin, retirees say yes, Social Security is a good deal. Government workers aren’t so sure. 38 percent say yes and 40 percent say no. Private sector workers are the least satisfied with the status quo. Fifty-one percent say Social Security is not a good deal for them.
When all is said and done, most Americans would like to see younger workers take more control over their retirement planning. But, at the same time, they want to make sure that the government honors the promises it has made to the nation’s retirees. That’s a challenge for both reformers and for our political process.
