SENATE RESOLUTION No. 94

 

STATE OF NEW JERSEY

 

211th LEGISLATURE

 

INTRODUCED MARCH 21, 2005

 

 

Sponsored by:

Senator BARBARA BUONO

District 18 (Middlesex)

Senator SHIRLEY K. TURNER

District 15 (Mercer)

 

Co-Sponsored by:

Senators Doria, Gill and Sacco

 

 

 

 

SYNOPSIS

    Memorializes Congress to reject privatizing Social Security.

 

CURRENT VERSION OF TEXT

    As introduced.

 

(Sponsorship Updated As Of: 6/24/2005)


A Senate Resolution memorializing Congress to reject Social Security privatization proposals of the President's Social Security Commission that would create private accounts, require deep cuts in guaranteed Social Security benefits and lead to excessive federal borrowing.

 

Whereas, Social Security is based on a promise to the American people: if you work hard and contribute to Social Security, you will be able to retire and live in dignity; and

Whereas, Social Security is the primary source of income for two-thirds of American seniors; and

Whereas, The State of New Jersey recognizes that over 1,363,814 beneficiaries in this State, including 140,693 disabled workers and their families, as well as over 100,000 children, receive guaranteed Social Security benefits which allow them to live without falling into poverty or suffering from a diminished quality of life because of retirement, disability, or the death of a parent or spouse; and

Whereas, As of January 2005 (the most recent data available) Social Security benefits for retired workers average only $965.32 per month, which amount is barely sufficient to maintain a decent standard of living in many parts of New Jersey, especially for seniors with relatively high health care costs; and

Whereas, The U.S. Congress has consistently spent the Social Security surplus on other programs including tax cuts, which has created a long-term funding shortfall; and

Whereas, In 2001 President George W. Bush created the President's Commission to Strengthen Social Security (referred to in this resolution as the "Bush Social Security Commission"), naming as Commission members only those who advocated Social Security privatization, and mandating that the proposals put forward by the Commission include privatization of Social Security; and

Whereas, The Bush Social Security Commission's proposed changes could reduce Social Security benefits to future retirees by as much as 46 percent; and

Whereas, Under the Bush Social Security Commission's proposal, the cuts in Social Security benefits would apply to all seniors, not just those who choose to participate in privatized accounts; and

Whereas, The cuts in Social Security benefits could be even deeper if individuals shift funds to privatized accounts; and

Whereas, Privatization advocates attempt to justify cuts in Social Security benefits by pointing to future projected shortfalls in the Social Security trust fund, but diversion of payroll tax revenues from the trust fund into privatized accounts would substantially accelerate the date by which the Social Security trust fund becomes insolvent; and


Whereas, In order to avoid accelerating the insolvency of the Social Security trust fund, the Bush Social Security Commission was forced to propose that the Federal Government incur as much as $4,700,000,000,000 in Federal debt (in today's dollars) by 2042; and

Whereas, The non-partisan Congressional Budget Office (CBO) predicts that there will be no shortfall until 2052, when Social Security will be able to pay only 80% of recipients' benefits due to insufficient revenue from the payroll tax, if no action is taken in the meantime; and

Whereas, In the past, the Social Security Trust Fund has encountered similar challenges, including larger projected shortfalls during the 1980's, which were resolved without privatization schemes and without reducing guaranteed benefits for the elderly, the disabled, and children; and

Whereas, Private accounts would not only reduce guaranteed benefits, but would also speed up the Social Security shortfall, causing recipients to receive reduced benefits by the year 2018 instead of 2052; and

Whereas, The deep cuts in Social Security benefits proposed by the Bush Social Security Commission could jeopardize the financial security of not only thousands of New Jersey residents but also the security of millions of Americans; and

Whereas, Under President Bush's proposal, guaranteed Social Security protections to the elderly, disabled, survivors, and children will gradually erode for future generations, driving millions of Americans into poverty and destroying the most successful social insurance program ever created in the United States; and

Whereas, It is recognized that Social Security faces future challenges, but powerful members in both the President's party and the opposition do not find the solution in privatizing the most successful government program in our nation's history; now, therefore,

 

    Be It Resolved by the Senate of the State of New Jersey:

 

    1. This House respectfully memorializes the Congress of the United States to reject the Social Security privatization proposals of the President's Social Security Commission that would create private accounts, require deep cuts in guaranteed Social Security benefits and lead to excessive federal borrowing.

 

    2. Duly authenticated copies of this resolution, signed by the President of the Senate and attested by the Secretary of the Senate, shall be transmitted to the presiding officers of the Congress of the United States and each member of New Jersey's Congressional delegation.

STATEMENT

 

    This resolution memorializes Congress to reject the Social Security privatization proposals of the President's Social Security Commission that would create private accounts, require deep cuts in guaranteed Social Security benefits and lead to excessive federal borrowing. Since its creation in 1935 as a retirement benefit, Social Security has provided much needed support to millions of Americans, and has grown to include benefits for children, the disabled, and dependent family members of workers who have died prematurely. New Jersey is home to over 1,363,814 Social Security recipients, including 140,693 disabled workers and over 100,000 children. The program is especially critical for women and for members of minority communities, as they are more likely to rely on the income that Social Security provides.

    The creation of private accounts would exacerbate, rather than cure, the problems that Social Security currently faces. Far from the dire projections of President Bush, the non-partisan Congressional Budget Office (CBO) has predicted that there will be no shortfall in the payment of benefits until 2052. Furthermore, the increased costs of administering a private account system, coupled with the diversion of payroll funds from the Social Security Trust Fund to private accounts, would actually accelerate the predicted shortfall while adding an estimated $2 trillion to the national deficit. Meanwhile, private accounts will be subject to the volatility of the market, and thus cannot guarantee the payment of benefits at the same level as the current system.

    This House feels that it would be highly irresponsible to risk destroying a program that has kept millions of Americans out of poverty for the last 70 years.