WASHINGTON- Baltimore resident Mary Vogel is worried.
Vogel, 76, worked for almost 35 years for United Airlines before retiring 15 years ago, but she has no life insurance and she said her pension barely covers the cost of gas and groceries. Now, the single retiree hears talk about changes to the Social Security system she has come to rely on and she worries.
“I am very concerned that I will lose my pension. Then all I will have is my Social Security,” Vogel said at a “roundtable discussion” with woman Democratic senators, who argued that President Bush’s proposal to reform Social Security would devastate women beneficiaries.
“We are absolutely, emphatically and irrevocably opposed to the Bush privatization plan,” said Sen. Barbara Mikulski, D-Md.
Mikulski was joined by Democratic Sens. Hilary Rodham Clinton of New York, Blanche Lincoln of Arkansas, Debbie Stabenow of Michigan, Patty Murray of Washington, and Barbara Boxer and Dianne Feinstein of California.
Republicans and Democrats agree that unless something is done, Social Security will eventually be unable to meet its obligations, as Baby Boomers age and fewer workers pay into a system that will have to support a growing number of retirees.
Bush’s solution is to let younger workers divert some of their Social Security taxes to private saving accounts that would be invested into what the White House calls “a mix of conservative bond and stock funds.” Workers who chose such accounts would have their government-paid benefits reduced at retirement, but would be able to draw on the private accounts to make up the difference.
Supporters say private accounts will give a higher rate of return on investment than what the government can provide.
The president has promised that his plan will not affect retirees and those near retirement. But Vogel says she is still worried.
“We were told Social Security would be around forever,” she said.
Mikulski cited a study Thursday that “privatizing Social Security is a bad deal for women,” because the accounts are susceptible to the rise and fall of the market, instead of a guaranteed collection.
“Women are particularly at risk,” she said. “We work less years because of family responsibilities, child rearing, family care-giving — we are paid less and we are in jobs that have less pension.”
It is precisely for those reasons that supporters say Bush’s proposed reforms are urgently needed. An administration Commission to Strengthen Social Security noted that women rely on Social Security benefits more than men do and tend to live longer than men, which shows that women need a strong and solvent system.
“If you don’t reform the system, the ones who will be hurt the most are women,” said Berna Brannon, Social Security analyst at the Cato Institute, a libertarian think tank.
Brannon added that roles of women in families have changed since Social Security was first enacted — more women are single moms and more are working now.
“The current system is not answering all the concerns of the new family structure,” she said.
Brannon challenged claims that the stock market is too risky for private retirement accounts, noting that while the market does fluctuate in the short term, it tends to be stabile over 30 to 40 years.
“It’s a long-term investment,” she said.
But Mikulski compared Bush’s private accounts plan to the “Wheel of Misfortune” that her staff put on display at the meeting. If the president’s plan goes through, she said, workers who invested in private accounts “could be disabled or broke, we could have a market crash, we could never retire in our lives, we could outlive our savings.”
“Listen to Bush spin the message, but he doesn’t spin the wheel of misfortune,” she said.
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