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Ryan, Strickland criticize Bush's privatization plan

Tuesday, February 22, 2005

BOARDMAN -- U.S. Reps. Ted Strickland and Tim Ryan said President Bush's plan to overhaul Social Security would cause permanent damage to the program and its participants.
"The president's plan creates a crisis where there is no crisis," said Strickland, of Lisbon, D-6th, at a town hall meeting Monday at the Boardman library.
The meeting, run by the two congressmen, attracted about 150 people. Strickland and Ryan said Bush's proposal to change Social Security, including the voluntary privatization for participants, is a disaster.
The money paid into the system by those working and their employers -- about 6.2 percent of annual salaries each from employees and employers -- provides funds for retirees, surviving spouses and those with permanent disabilities. For one-third of Americans over age 65, Social Security benefits constitute 90 percent of their total income, according to White House statistics.
Bush's assessment
The problem, Bush says, is the system is running out of money. In 1950, there were 16 workers to support every beneficiary of the pay-as-you-go Social Security program. That figure is down to 3.3 workers today, Bush says.
Without major changes to the program, Bush says higher taxes, massive new borrowing of money or severe cuts in Social Security benefits is on the horizon. Bush says that in 2018, the government will begin to pay out more in Social Security benefits than it collects in payroll taxes.
That's why the president is touting a proposal to permit people to put a portion of their payroll taxes into personal retirement accounts. Bush's plan doesn't have specifics. The president says he wants to hear from people before a final decision is made.
Bush's plan doesn't change the system in any way for those born before 1950.
Ryan and Strickland said the president's plan would cut future benefits to Social Security by 40 percent in 10 years. If nothing is done to Social Security, the program will provide full benefits for an additional 50 years.
"It's not a crisis, it's a problem," said Ryan, of Niles, D-17th. "We need to deal with it on a bipartisan basis, but it's not a crisis."
Strickland said the president's plan is risky, and would endanger retirement benefits for millions of Americans by permitting them to invest the money on the stock market.
Strickland and Ryan aren't opposed to people using a portion of their salaries for investments for their retirements. The congressmen say that investment should be on top of, and not in place of, Social Security.
Strickland said a congressional vote on overhauling the Social Security system will happen before August.
"It is probably the most valuable program developed by humankind," Strickland said.
Ryan said it is the "most efficient" government program, with only 1 percent going toward administrative costs.
In the audience
A number of people at the meeting agreed with the congressmen.
Vince Carnevale Jr. of Canfield, a 27-year-old teacher, isn't affected by Social Security. Teachers in Ohio don't pay toward the federal system, and instead contribute money, as do their employers, toward the State Teachers Retirement System.
But Carnevale said his 53-year-old parents are very concerned about the president's proposed changes.
"If the plan went into effect tomorrow, what would happen to the money they put into the system for 30 years?" he said. "They prefer the guaranteed money rather than the unpredictable."
Others at the meeting felt differently.
Albert S. Celec of Poland, a 74-year-old retired dentist, also won't be affected by the policy change.
"But I have five kids and five grandkids, and not a single one of them believe there will be anything left in Social Security when they go to collect," he said. "I think we should look at the president's proposal. I don't see anything wrong with it."
Laura Dudley of Warren, a 21-year-old Youngstown State University student, agrees. Dudley works as a part-time waitress and supports the president's plan.
"I personally love the idea of privatization," she said. "It's optional. You can put a small amount into it. I want to take the money I earn and invest it. I know what to do with my money better than the federal government."