Letter to Sen. Rubio on Social Security Projections
|Written by Dean Baker|
|Thursday, 25 August 2011 14:40|
317 Hart Senate Office Building
Washington, DC 20510
Dear Senator Rubio:
During a recent speech at the Reagan Library, you took issue with several aspects of the Social Security program. With all due respect, many of your assumptions about the program are incorrect and fortunately there is little cause for concern.
For instance, you mentioned the fact that your mother has paid into the Social Security system and it would be difficult to tell her that she was being kicked off the program. However, you then say of your generation
"...that if we want there to be a Social Security and a Medicare when we retire, and if we want America as we know it to continue when we retire, then we must accept and begin to make changes to those programs now, for us."
Protecting the benefits of people currently receiving Social Security benefits is commendable. However, the assertion that Social Security will not be there by the time you are eligible for it is simply wrong.
The Congressional Budget Office's projections show that the program will be able to pay full benefits through the year 2038. If the projections prove accurate, and Congress never makes any changes to the program, then Social Security is projected to be able to pay slightly more than 80 percent of scheduled benefits in subsequent years. This means that you would be able to anticipate a benefit of $40,645 in 2038 and at least $32,516 in subsequent years (both in today's dollars). In other words, the projections show that you can expect to get a substantial benefit from Social Security as long as you live.
You also implied that the ratio of workers to beneficiaries has drastically shifted from a 16-to-1 ratio when the program began to a 2-to-1 ratio in the near future. In actuality, 50 years ago, there were just five workers for every retiree. In this same 50-year span, the tax rate for Social Security has more than doubled, from 3.0 percent for the employer and employee in 1960 to 6.2 for each at present. As well, the tax base has risen considerably from $4,800 in 1961 ($30,0,000 in today's dollars) to $106,800 in 2011.
As discussion of the budget and the future of Social Security continues, I hope that you will be able to present the situation more accurately in future public statements. If you would like any additional background on the program, I would be happy to assist you.