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90_HJ0006
LRB9001141DJcd
1 HOUSE JOINT RESOLUTION
2 WHEREAS, Social Security provides benefit coverage for
3 almost everyone who is employed or self-employed in the
4 United States, with the exception of railroad workers and
5 some federal, state, and local government employees; it
6 anchors the retirement security of the vast majority of
7 Americans; for 26% of the elderly, Social Security accounts
8 for 90% of their income; for 14% of older beneficiaries,
9 Social Security is their only source of income; and for 60%
10 of American retirees, Social Security accounts for over half
11 their income; and
12 WHEREAS, Social Security is a model government program,
13 providing retirement security for most Americans, reducing
14 poverty among the elderly, and maintaining low administrative
15 costs; unlike private pension plans, Social Security is
16 protected from job loss, bad investment decisions, and
17 economic fluctuations; and
18 WHEREAS, The Social Security system is a compact between
19 generations of Americans, under which the taxes paid by
20 today's workers fund the benefits paid to current retirees;
21 the current ratio of Social Security tax-paying workers to
22 Social Security benefit-receiving retirees is 3.3:1, but is
23 expected to fall to 2:1 within the next 35 years as members
24 of the "baby boom" generation begin to retire; and
25 WHEREAS, Under the current Social Security tax and
26 benefit structure, the Federal Old-Age and Survivors
27 Insurance trust fund, which pays Social Security retirement
28 benefits, will be able to pay benefits for about 35 more
29 years before its assets are exhausted; and
30 WHEREAS, Some have proposed that the Social Security
31 system be "privatized" to some extent in order to avert a
32 crisis in Social Security funding; and
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1 WHEREAS, Various plans have been proposed for privatizing
2 Social Security, including the following: (1) allowing
3 high-income individuals to opt out of the system; (2)
4 requiring that Social Security taxpayers set aside a portion
5 of their Social Secuity taxes for investment in stocks and
6 bonds; (3) requiring Social Security taxpayers to open
7 small-scale individual accounts, on top of the present
8 system, for investing in stocks and bonds; and (4) gradually
9 replacing the present defined benefit system with large-scale
10 defined contributions, held outside the Social Security trust
11 funds, that could be invested in stocks and bonds; and
12 WHEREAS, The higher rates of return promised by the plans
13 for privatizing Social Security come with considerable risks,
14 including the following: inflation; low and fluctuating
15 financial returns; failure to make wise investment choices;
16 outliving one's investment assets or having survivors who
17 outlive those assets; unpredictable retirement income; and
18 not being able to adequately fund a personal retirement
19 account because of working part-time, dropping out of the
20 workforce in order to raise children or care for other
21 dependents, or having low wages; and
22 WHEREAS, Action is needed to restore long-term solvency
23 to the Social Security system, but the system is neither in
24 crisis nor near crisis; it is completely sound, as is, for
25 the next 35 years; and long-term solvency can be restored by
26 increasing revenue, reducing benefits, or some combination of
27 the two--for example, a series of small tax increases
28 beginning in 2010 and continuing to 2040 would keep Social
29 Security going at current benefit levels indefinitely; and
30 WHEREAS, Any measure to restore long-term solvency to the
31 Social Security system should not stray from the principles
32 that have successfully shaped the program as we know it
33 today: the system is self-financed; employees and employers
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1 contribute equally; participation is compulsory; benefits are
2 earned; benefits are related to pay and time in the
3 workforce; and benefits are not based on need but are
4 nevertheless progressive; and
5 WHEREAS, In theory, every steadily-employed worker,
6 whatever his or her age or income, could come out ahead under
7 privatization, but a favored few--namely, young, high-earning
8 fast-trackers now in their twenties and early thirties--stand
9 to gain much more than everyone else; middle-aged,
10 middle-income workers will gain little from privatization and
11 will pay dearly in extra taxes to finance the transition to
12 the new system; and low-wage workers who make poor investment
13 decisions would be the biggest losers under privatization and
14 would face poverty-stricken retirements; and
15 WHEREAS, Social Security is social insurance; social
16 because it spreads risks across a large pool without the
17 problems of adverse selection, and insurance in that it
18 offers protection when certain contingencies prevent work;
19 allowing high-income individuals to opt out of the system
20 would undermine that social insurance character; and
21 WHEREAS, Eliminating the current Social Security system,
22 in substantial part or altogether, in favor of mandated
23 "privatized", individually directed accounts would saddle
24 individuals with risks not experienced since the Great
25 Depression of the 1930s, and the hoped-for consequences of
26 private savings being invested in private markets may bring
27 on more speculation, depressed consumer demand, and less
28 productive growth in the future; therefore, be it
29 RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
30 NINETIETH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, THE
31 SENATE CONCURRING HEREIN, that we urge the United States
32 Congress to continue funding Social Security in its present
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1 form and to not "privatize" Social Security in any way; and
2 be it further
3 RESOLVED, That suitable copies of this resolution be
4 delivered to the President pro tempore of the United States
5 Senate, the Speaker of the United States House of
6 Representatives, and each member of the Illinois
7 congressional delegation.