Social Security:
The American
Promise.
June 2010
www.socialsecuritymatters.org

Workers contribute 6.2% of pay up
to a maximum of $106,800 in
earnings.
 Employers match this contribution,
for a total of 12.4%.
 Today’s contributions cover today’s
benefits – basically a pay-as-yougo system.
 Social Security is an insurance
policy that protects both workers
and their families. Benefits replace
a portion of lost wages due to
death, disability or retirement.
June 2010
www.socialsecuritymatters.org
June 2010
www.socialsecuritymatters.org
Americans
depend on
Social
Security!
June 2010
www.socialsecuritymatters.org
June 2010
www.socialsecuritymatters.org
• Benefits for low-wage workers replace a larger
percentage of their earnings, in order to give them a
more adequate retirement income.
• Higher-wage workers get a smaller percentage, but
more money, reflecting larger contributions.
• All beneficiaries get a full Cost of Living Adjustment
(COLA) – 100% of the annual increase in the
Consumer Price Index (CPI).
• Once your benefits start, they’re paid monthly for as
long as you live. They can never run out!
June 2010
www.socialsecuritymatters.org
Social Security currently has
a surplus of $2.6 trillion
(after paying all benefits).
 Trustees say all benefits can
be paid in full through 2037,
even if no changes are made.
 The surplus may be gone (the
over payments in taxes) in
2037, but payroll contributions
alone will cover of all benefits.
 This manageable shortfall, 2%
of taxable wages, can be
corrected over time.
Source: 2009 Report from the Social Security Trustees.
June 2010
www.socialsecuritymatters.org
•
Today, Social Security benefits are
about 4.4% of GDP.
•
In 2034, when most baby boomers
are retired, total benefits will rise to
6.2% of GDP (an increase of just
1.7% over 25 years).
•
The impact on GDP was much
greater when the boomers were
children (to cover education
expenses, costs went up 2.8%
over 25 years).
•
The US paid to educate the biggest
generation in history; surely we can
afford a smaller increase to pay for
the boomers in old age.
June 2010
www.socialsecuritymatters.org
1. Social Security has a dedicated revenue source:
payroll contributions. It’s self-sustaining and
doesn’t depend on the government’s general
fund.
2. By law, Social Security is prohibited from
borrowing in order to pay benefits.
3. Revenue that exceeds annual benefit payments
(the trust fund) is invested in U.S. Treasury
Bonds at market interest rates; Social Security
can draw on the principle and interest as needed.
June 2010
www.socialsecuritymatters.org
• Costly wars in Iraq and
Afghanistan.
• Tax cuts in 2001 and 2003
for the wealthy (High-income
households in top 1% of
income: those making over
$350,000/year).
• Recovery Measures
(economic stimulus).
• Bank Bailouts/TARP/
Housing Market Collapse.
• The Recession.
June 2010
www.socialsecuritymatters.org
• High unemployment = lower tax revenue and
increased federal spending for unemployment
insurance, Medicaid, food stamps, etc.
• Some in Washington are using this short-term fiscal
problem to build support for long-range federal budget
cuts.
• Under pressure, the President created the National
Commission on Fiscal Responsibility and Reform
(or “fiscal commission”) – to come up with a broad
vision for a deficit reduction.
June 2010
www.socialsecuritymatters.org
 Comprised of 18 Commissioners: 12
Members of Congress (6 Democrats/6 GOP),
6 appointed by the President.
 A vote of 14 Commissioners is required to
send recommendations to Congress.
 Recommendations to Congress are
scheduled to happen in the beginning of
December 2010.
June 2010
www.socialsecuritymatters.org
Former GOP Senator Alan K. Simpson and Former Dem White
House Staffer Erskine Bowles
“We’re going to mess with
Medicare, Medicaid and Social
Security because, if you take
those off the table, you can’t
get there.” – Erskine Bowles
June 2010
www.socialsecuritymatters.org
This country is going to the
bow-wows unless we deal
with entitlements – Social
Security and Medicare.
- Alan K. Simpson
It doesn’t add to the
deficit, and it’s so
important to American
families and
individuals.
June 2010
www.socialsecuritymatters.org
As the notorious Willie Sutton
said, when asked why he robbed
banks: “Cause that’s where the
money is!”
 This quote has been
repeated when talking about
cuts to Social Security by
both Commissioner and
Senator Judd Gregg and by
Fed. Chairman Ben
Bernanke
 Are they saying they want to
steal from American workers?
 Tell them HANDS OFF of
your SOCIAL SECURITY!
June 2010
www.socialsecuritymatters.org
That’s
right!
Peterson is referred to as a longtime
“deficit hawk” and was a Nixon
Commerce Secretary and Social
Security privatizer.
He donated $1 billion to his own
foundation in order to:
 Build public support for deficit
reduction.

Push his message that started in his
newspaper, sponsored forums, and
funded town hall meetings.

Sponsor “unbiased” AmericaSpeaks
events across America on June 26,
2010.
Peterson’s #1 Target is
Social Security.
June 2010
www.socialsecuritymatters.org
I’ve made BILLIONS
on Wall Street. Who
needs Social
Security when you
have so much
money? Not me!
Definitely, YES!
 The cost of making the 2001 & 2003 Bush tax
cuts permanent is 3 times the amount of Social
Security’s shortfall over 75 years.
 The very same people who championed those
tax cuts for the rich are now threatening the
retirement security of average Americans.
June 2010
www.socialsecuritymatters.org
“For over 70 years, Social
Security has been a pillar of
our national economy,
providing income to millions,
even when the job market
and the stock market have
failed us miserably. Why
would anyone want to
change it now?”
- Gerald W. McEntee
June 2010
www.socialsecuritymatters.org
1.
Raising the retirement age to 70. An increase in the retirement age is a
reduction in lifetime benefits, and many workers, like nurses, teachers,
and construction workers, cannot continue in physically demanding jobs
into their seventies!
2.
Stop indexing the benefit formula to wage increases; instead, use
prices, which rise more slowly. This will further reduce the average
benefit in real dollars, making it progressively harder for retirees to
support themselves.
3.
Reduce the annual COLA. Another benefit cut that will hurt
beneficiaries already struggling to get by on dollars that don't go as far as
they used to.
4.
Means testing. Social Security is not a welfare program. It is designed
to provide retirees with a baseline retirement income, according to what
they paid in.
We will not stand for CUTS to Social Security!
June 2010
www.socialsecuritymatters.org
1. Be aware
2. Get the facts
3. Stay engaged
Pick up the phone,
send an e-mail or letter,
and tell Congress that
Social Security Matters
to you!
www.socialsecuritymatters.org
www.socialsecuritymatters.org
June 2010