ASBA Update From Washington

As an ASBA member, you now have free access to news and updates on important issues from our legislative team in Washington DC.

March 2008
by James C. Musser, ASBA Washington Representative

Regular readers of this column know the Social Security Trustees have issued dire reports on the state of the finances of the Social Security program and predict the Social Security Trust Fund will soon be bankrupt. Given that such an important program stands on the verge of ruin and Social Security payments to millions of seniors and disabled persons are jeopardized, the silence from Congress and the presidential candidates on the topic is deafening. This month, your humble columnist spoke with Congressman Ron Lewis (R-KY) a member of the Social Security Subcommittee and author of a bill, to save the Social Security program from bankruptcy, H.R. 1090, the Social Security Guarantee Plus Act.

In the Trustees' most recent report on the financial state of the Social Security Trust Fund, the Trustees said dedicated tax revenues would fall below the operating costs of the program in 2017 and the trust fund will be completely exhausted by 2041. With 2017 only nine years from now, the urgency to act quickly cannot be overstated. As Congressman Lewis pointed out, this issue must be on the agenda of all the presidential candidates. Lewis said, "It's not about the next election; it's about the next generation."

Congressman Lewis said that not acting to save Social Security would be the most irresponsible thing Congress could do. He stated, "We must refocus our concern and reinvigorate our efforts to address the serious challenges Social Security programs face. This is not a Republican or Democrat issue, it is an American issue. The choices without reform are stark: massive benefit cuts, enormous deficits or huge tax increases."

Lewis' plan is designed to establish a voluntary program under which workers would be allowed to receive a refundable income tax credit, up to $1000, to invest in a tax-free retirement account. At retirement, the worker would receive 5% of the fund as a tax-free, lump-sum payment. The remainder of the fund would be used to pay the full guaranteed Social Security payment. The accounts would be inheritable, tax-free, if the owner died before reaching retirement. The Congressman stressed that his plan is based on three core principles, fairness to all workers, individual ownership and control of the retirement funds and full guaranteed Social Security benefits without increasing taxes, lowering benefits or raising the retirement age.

Even though insolvency looms on the horizon for Social Security, Congressman Lewis has found few Members of Congress willing to open the discussion about saving this crucial program. Lewis indicated that he has repeatedly attempted to engage other Members and to reach across the aisle to Democrats but fear of touching the "third rail" of American politics has kept his colleagues from either supporting his proposed solution or offering one of their own. Likewise, virtually nothing has been offered by the presidential candidates about the type of comprehensive overhaul Social Security and Medicare both must have in the near future.

Congress will be taking a District Work Period during the last two weeks of March. It is a prime time to call your local Member of Congress in his or her district office to ask what he or she plans to do to save Social Security. During the Summer District Work period, or any other time one is scheduled, make sure to attend congressional town hall meetings and ask face-to-face about the future of the Social Security program and what your Representative plans to do to save it.

ASBA congratulates Congressman Ron Lewis and his fine staff for their hard work on behalf of seniors. Seniors everywhere should demand the same kind of effort from their Congressmen and Congresswomen.

ASBA closely monitors the government's actions affecting you and your family. Check back each month for the latest news from Washington, D.C.

James C. Musser, Esq. is a legislative consultant based in Falls Church, Virginia. His reports are updated monthly.