Fact Sheet: Strengthening Social Security for Today's Younger Workers

TODAY'S PRESIDENTIAL ACTION

• Today, President Bush Visited Northern Virginia To Meet With Younger Workers Who Are Concerned About The Future of Social Security. The President has called for allowing younger Americans the option of safely investing a portion of their payroll taxes in voluntary personal accounts that they own and control within the Social Security system.

BACKGROUND: YOUNGER WORKERS HAVE THE MOST TO GAIN FROM SOCIAL SECURITY REFORM

• Younger Americans Face A Stark Reality.
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  • There Is A Narrow Window To Fix Social Security For Today's Youth. In just three years, the first Baby Boomers will begin to retire, putting added strain on the system. In 2017, the system will begin paying out more than it takes in. This will ultimately result in drastically higher taxes, reduced benefits, increased debt, or cuts to other critical government programs.
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  • The Government Has Borrowed $1.7 Trillion From The Social Security Trust Fund. The government has borrowed the total value of the Trust Fund to pay for other government spending. Beginning in 2017, the government will have to begin backing up these paper promises with real money.
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  • A Permanent Solution Is Needed For Today's Youth. A band-aid solution of quick fixes and small tweaks will only pass this problem on to the next generation.

  
  

• Younger Americans Support The President's Social Security Plan.
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  • Younger People Have Little Faith In The Current Social Security System. A recent national poll by Harvard University's Institute of Politics (IOP) found seven out of ten American college students did not believe Social Security would pay out benefits when they retire.
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  • Today's Younger Workers Want A Nest Egg. Younger workers have seen how the government has used their Social Security taxes to fund other programs, and they understand that voluntary personal accounts offer a better way to fund Social Security. A recent Fox News poll found 84 percent of Americans ages 18 to 55 believe they should have the option of creating a voluntary personal account within the Social Security system.
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  • Younger Workers Already Belong To The Investor Class. Younger workers today are more familiar with investments than previous generations. Through 401(k) plans offered by employers across the country, workers know the power of compound interest and how their contributions to these accounts can grow steadily over time.

  
  

• The President Has Outlined Details To Guide The Legislative Process.
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  • Future Generations Will Receive Benefits Equal To Or Greater Than Today's Seniors. Under any plan to reform Social Security, future generations should receive at least as much as seniors receive today.
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  • Protect Future Generations Who Depend on Social Security The Most. Low-income workers should receive benefits that grow faster than benefit increases for the wealthiest seniors, which would grow no faster than the rate of inflation. This change alone would solve 70 percent of the funding problems facing Social Security.
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  • Replace The Empty Promises Being Made to Younger Workers With Real Money. Younger workers should have the option of putting a portion of their payroll taxes into a voluntary personal account. This nest egg will give workers an opportunity to receive a higher rate of return than the current Social Security system can provide.
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  • The President Will Continue To Work With Congress. Social Security is too important to pass this problem on to the next generation. The President has committed to work with both the House and Senate in a bipartisan way.