07.24.01

Senator Maria Cantwell's Remarks (as prepared) before the National Committee to Preserve Social Security & Medicare Press Conference on Social Security Privatization

President Bush's Commission on Social Security reform is meeting today to vote on its first effort in reforming Social Security. Social Security is there for a reason. It is meant to be a guarantee - not a gamble.

Social Security will not be secure if it is invested in the stock market. Consider the market's performance over the past year -- the S & P 500, which is used to measure average stock performance, has dropped over 18 percent. And NASDAQ has lost over half of its value in the last year. If we had already switched to a private Social Security fund, anyone who retired during the past year would be much less secure because of the market's losses.

Frankly, the President's idea seems to presuppose that Social Security beneficiaries are people who have sailed through their working years in good health, accumulated significant personal savings along the way, and are entering retirement with a collection of travel brochures in one hand and a diversified portfolio in the other.

Clearly, we need to make some changes to Social Security so that it can continue to provide benefits for hard-working Americans and their families.

Like the President, I have great confidence in the strength of the American economy and the long-term earning power of the stock market. But privatizing Social Security would mean that any temporary market reversal could become a permanent loss of security for Americans in retirement.

Do we want to take Social Security and gamble it in the stock market?

Unlike Social Security, private accounts do not have guaranteed cost-of-living adjustments to protect against inflation and help keep the elderly, especially older women, out of poverty.

I believe that Americans should save more for retirement. And I believe that the federal government can help them do so.

The federal government can, and should, provide workers with more options to save for retirement - and we can provide more creative choices for young workers - without eliminating Social Security's traditional role as a safety net.

One option is to thoroughly examine expanding government incentives to save for retirement through new public investment accounts or tax credits -- on top of the underlying Social Security framework.

It is fair to assume that the financial security of a woman retiring in the next century - and beyond - will increasingly depend on her own earnings. But full privatization is a shortsighted strategy that could leave millions of people, especially women, without Social Security benefits when they need them most.

Women are still more likely than men to arrive at retirement with limited personal financial resources, with more low- or no-earning quarters in their employment records, and with no employer-provided pension.

In fact, 93 percent of all American women over the age of 65 receive Social Security benefits -- no other source of income even comes close to serving so many elderly women. Even more important, 40 percent of those women rely on their Social Security benefits for at least 90 percent of their income.

Every investment portfolio should be diversified and balanced, with some investments that are secure and stable and others that offer more rapid growth and higher yields.

Social Security is the bedrock foundation of a diversified retirement portfolio. Privatizing Social Security would seriously undermine that foundation, putting millions of Americans at risk.

A privatized system of personal investment accounts would fundamentally change the structure of the Social Security system, from one based on guaranteed benefits and shared risk to one based on individual investment strategies and individual risk. That's asking too much of women, low-income seniors, families surviving the death of a spouse and parent, and millions of other Americans who rely on Social Security benefits for essential income.