AUGUSTA – None of the members of Maine’s congressional delegation said the nation must act fast to change Social Security.
Reaction to President Bush’s proposal to quickly revamp the system and partially privatize it ranged from concern and caution by Republicans to outright hostility by Democrats.
Reps. Tom Allen and Mike Michaud, both Democrats, disagreed with Bush’s assessment Wednesday during his State of the Union speech that Social Security is headed toward bankruptcy in less than four decades. Doing nothing now would necessitate “higher taxes and massive new borrowing” or “severe cuts,” Bush said.
Allen, who represents Maine’s 1st Congressional District, said Bush “has created a false picture of the system’s finances.” Problems with the system actually would be addressed best by “relatively minor adjustment,” Allen said in a written statement.
Bush proposed diverting 4 percent of the payroll taxes from Social Security for private investment in the stock market. That would “require both massive new borrowing and extensive benefit cuts,” Allen said.
Michaud, Maine’s 2nd Congressional District representative, said in a written release that the Social Security program is fully funded until 2052.
“Privatizing it would lead to cuts in benefits of up to 46 percent and cost $2 trillion,” he said.
Michaud is expected to reintroduce a resolution that would amend the U.S. Constitution, protecting the Social Security savings account from withdrawals for other purposes, and preventing diversion of anticipated revenues for other purposes, such as private accounts.
“I strongly oppose privatizing Social Security,” he said.
Sen. Olympia Snowe, a Republican, said there is no crisis, recalling a real shortfall in 1983 when Social Security faced imminent insolvency. But that’s not the case today, she said in a phone interview Thursday.
“This time it’s a long-term problem,” she said. “We have some time, in my estimation, to examine this issue.”
A new Maine poll showed Mainers feel the same way, with 56.3 percent saying the program has major problems but is not in crisis.
The survey by Strategic Marketing Services of Portland also showed only one-quarter of respondents felt it is more important to “let younger workers decide for themselves how to invest some of their contributions” than it is for Social Security to yield “guaranteed monthly benefits.”
Snowe said all options and proposals should be carefully reviewed. Both she and Sen. Susan Collins said no action was needed during the current congressional session.
In fact, Snowe said that if trustees used less conservative projections in estimating Social Security’s revenues, “we wouldn’t have to worry about it at all.”
While agreeing that younger investors should be able to explore ways to supplement their retirement income, Snowe said she feared privatization of Social Security could destabilize the system.
“I have real concerns about that,” she said. “We should not do anything to erode that type of support” retirees get from the current Social Security program, which pays an absolute amount.
Collins agreed.
“We need to have a system … that has some sort of guaranteed benefit so that people who’ve worked hard their whole lives don’t find that they are plunged into poverty when it comes to retirement because their personal account didn’t do well.”
But she said something must be done to tweak the system to head off an eventual shortfall.
“I have no doubt Social Security is headed toward insolvency in a number of years unless act to reform it and save it.”
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