In 1935, after the bank failures and a stock market crash that wiped out the savings of millions of Americans, the nation turned to Washington to guarantee the elderly a decent income. In those days, over half of America's elderly lacked enough income to be self-supporting. The Social Security Act was enacted at the urging of President Franklin D. Roosevelt to create a social insurance program that would ensure workers would have a source of income after they retired.
Today, while many Americans are seeing their 401(k) retirement savings dwindle as a result of the coronavirus and its impact on our economy, Social Security remains the one program that millions of older Americans can rely on even in turbulent economic times.
Yet, despite one economic crisis after another, there are those in Washington and the private sector who continue to support privatizing Social Security, which would allow workers' payroll contributions to be invested in private accounts. Social Security privatization would effectively gamble Americans' hard-earned benefits on Wall Street. If markets tumble, retirees' Social Security checks would be reduced.
The National Committee led the charge to stop privatization when it was pushed by former President George W. Bush. We succeeded in defeating this dangerous plan, but calls for privatization were quickly replaced with proposals to raise the Social Security retirement age and adopt a stingier Cost-of-Living Adjustment (COLA), which continue today.
The coronavirus pandemic exposes the deep flaws in the privatization scheme and any plan that would reduce our government's obligation to workers and retirees. Congress should be boosting, not reducing, revenue for the Social Security system — as Representative John Larson's "Social Security 2100 Act" would do (in addition to increasing benefits). And all Americans should be extremely wary of any proposal to alter the fundamental nature of Social Security, including — and especially — privatizing their earned benefits. For proof, look no further than the turmoil on Wall Street.
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