Deputy Commissioner Lockhart:
Delays in Strengthening Social Security
Mean More Difficult Choices in the Future
James B. Lockhart, the Deputy Commissioner of Social Security,
stressed the need to strengthen Social Security in comments to the
Fifth Annual Retirement Research Conference at the National
Press Club. "The sooner we address the problem, the less abrupt
the changes will have to be," said Lockhart.
Lockhart’s presentation showed that Social Security’s current pay-as-you-go
system is unsustainable because of the aging of America’s population,
and that the tax increases or benefit reductions needed to maintain
Social Security’s solvency rise with each year that action is delayed.
To keep Social Security solvent over the next 75 years would require
a 15 percent payroll tax increase if action were taken today. Delaying
action until 2018 would mean a tax increase of 22 percent, and waiting
until 2042 the payroll tax increase would rise to 45 percent above
Likewise, to keep Social Security solvent over the next 75 years
by reducing benefits would require a 13 percent cut today, but the
reduction would increase to 16 percent if action were delayed until
2018, and 31 percent if delayed until 2042.
Lockhart said, "The unattractiveness of relying exclusively
on tax increases and benefit reductions to bring Social Security
into balance has led some Republicans and Democrats to turn to options
like personal accounts that could improve the rate of return on
Social Security contributions."
On March 17, upon the release of the 2003
Social Security Trustees Report, President Bush said, "I
hope that Members of Congress will join with the Social Security
Administration and other interested parties in a national dialogue
about how to best strengthen and protect Social Security."
Lockhart stressed that the Social Security Administration will work
with Members of Congress of both political parties to further bipartisan
efforts to strengthen Social Security for future generations.
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