RALEIGH, N.C. – A typical 20-year-old North Carolinian will lose $152,000 during retirement if the president’s Social Security privatization plan is enacted, according to a report released today by the Institute for America’s Future. It would also mean a 15 percent benefit cut for a 45-year-old worker today and a 25 percent benefit cut for a 35-year-old worker in North Carolina.
Statewide leaders released the report today at a news conference held by the Campaign for America’s Future at the State Legislative Building, one day before President Bush is expected to visit Raleigh to push his plan to replace the Social Security safety net with a risky privatization plan.
State Rep. Jennifer Weiss, D-N.C., opened the news conference noting that Social Security’s guaranteed benefits provide residents across the state a secure retirement they cannot afford to lose.
“The system has provided a unique and necessary safety net for thousands of North Carolinians since its inception,” said Rep. Weiss. “There are common-sense adjustments we can make to ensure the future of this highly successful program that has lifted millions out of poverty. People in North Carolina deserve to get the benefits they paid for, and we cannot risk our children’s future on the president’s plan that will only make things worse.”
AARP North Carolina State Director Bob Jackson joined Rep. Weiss, noting that privatization is a solution that is worse than the problem.
“We need to strengthen Social Security for our children and grandchildren,” said Jackson. “Private accounts would inevitably lead to cuts in Social Security’s guaranteed benefits while passing a debt onto future generations.”
North Carolina Justice Center Policy Director Rob Schofield also joined the news conference. Schofield noted that the President Bush’s push for privatizing Social Security would add to the national debt and burden generations of Americans.
“Privatization will add an additional $2 trillion to the deficit in the first decade alone, and that will pass huge bills onto children in North Carolina and throughout the country,” said Schofield. “We will have to borrow an additional $15 trillion over 45 years to pay for this plan, which will only help foreign banks in China and Japan, not our children. We need solid funding for Social Security, not IOU’s.”
Older Women’s League president Rosemarie Downie joined the conference to speak about how the privatization plan would affect North Carolina women and current beneficiaries.
“You may be hearing that these private accounts won’t affect people who are already retired like me, but we won’t be fooled,” said Downie. “Private accounts put everyone’s Social Security at risk because the funds needed to set up the accounts are the same funds that pay for current benefits. These accounts don’t save money for Social Security, they cost money.”
North Carolina AFL-CIO’s MaryBe McMillan also pointed out that the privatization scheme left a crucial safety net program open for corruption.
“This plan will create a feeding frenzy for Wall Street firms,” said McMillan. “Politicians will decide which firms are hand-picked to make billions of dollars—off your retirement funds. We should do what is best for working Americans, not for those who have political influence.”
Lanya Shapiro, a young professional from Durham, also spoke at the news conference. Shapiro said that young people are familiar with the volatile stock market and are not willing to gamble away their retirement security.
“Young people already have enough to worry about—how we’re going to pay for school, if our friends are going to come back safe from Iraq, if we’ll be able to afford health care,” said Shapiro. “And now Bush wants to jeopardize our future financial security by making us gamble our retirement in the stock market? It’s just not right.”
Today’s report shows that there are currently more than 1.4 million people in North Carolina who depend on Social Security’s safety net. More than 891,000 of these beneficiaries are workers, retired after a life of work. The typical retired worker in North Carolina received a Social Security check for $895 each month in his or her mailbox in 2003.
According to the National Women’s Law Center, the president’s plan would cut income to North Carolinians by $6 billion each year, including the White House’s income estimates from private accounts. This accounts for more than one-fifth of the state’s government expenditures in 2002.
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