Butterfield talks Social Security
By Barbara Arntsen
Published in News on March 30, 2005 1:48 PM
"We need the plan."
First District Congressman G.K. Butterfield said Tuesday that lawmakers in Washington are waiting to hear the details of President Bush's plan to privatize Social Security before passing judgment on his idea. He spoke at a "town hall" meeting held at the Wayne County Courthouse after spending the day meeting with local officials and touring Seymour Johnson Air Force Base.
"We know the president has a plan about privatization of Social Security and he has asked us to hold our powder until we see his plan," Butterfield said. "We're waiting to see it."
Butterfield, a Democrat, said that Bush's decision to take his proposal to the public on a tour of cities around the nation has left Congress with little to go on.
"We're disappointed that he's doing that before we get a chance to see it," Butterfield said. "We cannot start a discussion without seeing his plan."
Butterfield said that people need to understand that the Social Security Trust Fund is not bankrupt. The fund has $1.7 trillion in it and it is increasing in value, he said. The problem, Butterfield said, is that within the next 13 years the increasing number of retirees -- the baby-boomer generation -- will begin to draw more money from the fund than is being paid into it.
"In 2018, there will be more going out in payments than will be coming in," Butterfield said. "To balance, we will have to call upon reserves."
Estimates show reserves would be depleted by 2052, he said.
The nation's Social Security system was created in 1935. It was a wonderful concept, Butterfield said, but it was not intended to be a person's main source of income in their retirement.
"It's not an investment scheme," he said, "but it's an insurance policy."
Two-thirds of the money paid out of the trust fund goes to retirees. The remainder goes to minor survivors and disabled workers.
The congressman said that changes are necessary to Social Security, but that the more pressing issue facing Congress is the national debt. The issues are intertwined, Butterfield said. To start up the private retirement accounts Bush wants people to have would cost $2 trillion, he said.
Butterfield said that President Bush believes that the long-range benefits of privatization would make spending the $2 trillion worthwhile.
"But where's it going to come from?" Butterfield asked. "Things are not well in respect to the fiscal budget passed. We are projecting to spend $376 billion more than we are taking in, and that's not good."
That deficit doesn't include the financing of the wars in Iraq or Afghanistan, Butterfield pointed out.
Six percent of the budget each year is spent on paying the interest on the national debt, which is now more than $8 trillion, Butterfield said. Forty-five percent of that debt is owed to foreign countries, mainly Japan and China.
Ed Wharton, the chairman of the Wayne County Republican Party, said that he was glad to hear that Butterfield was willing talk openly with Republicans about Social Security.
Sheriff Carey Winders, who also is a Republican, said he believes that people have been hearing about the problems with Social Security for so long that they have grown desensitized to the issue.
"The people here tonight are mainly elected officials, or involved in politics," Winders said. "The average everyday citizen should be here to listen to this. I don't know if they've just grown calloused over the years."
Butterfield said that Social Security was "long-range trouble." He said that both parties had borrowed from the trust fund over the years.
One man said that former President Ronald Reagan's tax cuts in the 1980's had helped the country, as had recent tax cuts.
"So, how do we know that the Presidents' plan to privatize Social Security won't work?" he asked Butterfield.
The question, Butterfield replied, is "Do we need to gamble?"
"What happens if those investments fail?" Butterfield asked.
County Commissioner Andy Anderson, another Republican, said he hopes that Butterfield can work on the issue with both Democrats and Republicans.
"I have some questions about privatization, and about controls on the way the money is invested," Anderson said. "I can see people saying 'Oh, poor me, lost all my money,' and expecting the government to help them out.'"
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