WASHINGTON – Anyone wanting to understand why proposals to reform Social Security have been described as “a political hot potato,” probably need look no further than their neighbors.
About one in seven Marylanders was a Social Security beneficiary in 2002, getting an average monthly benefit of $834, according to the most recent information available from the Social Security Administration.
And Maryland is hardly unique: One American in six got benefits in 2002, when the national average monthly payment was $815, according to the administration. Benefits include retirement payments as well as disability and survivors’ payments.
“Obviously when you are dealing with an issue that a lot of people depend on, it becomes kind of a political hot potato,” said Rea Hederman, senior policy analyst at the Heritage Foundation.
But lawmakers have been forced to handle that hot potato by the country’s changing demographics: Where there were 16 workers paying in to the system for every one person receiving benefits when Social Security started, the ratio is now about 3.3 workers for every beneficiary.
The numbers were slightly better in Maryland, where there were four workers paying in to the system for every beneficiary drawing money out of it.
While all sides agree that something has to be done, they disagree on what to do and how fast to do it.
President Bush said in his State of the Union Address that the system is in crisis. He proposed fixing it by creating personal accounts, in which workers could take some of the money that would normally go to the Social Security Administration and invest it in private accounts for their retirement.
But Democrats argue that private accounts would undermine the system instead of fixing it. They say the problem is not nearly as bad as Bush makes out, and can be fixed with changes that keep the current system, but tinker with it.
Democrats have been campaigning furiously to protect what they call a “guaranteed benefit.”
“I am concerned about the impact it has on people in Maryland and around the nation,” said Rep. Ben Cardin, a Democrat whose district includes parts of Baltimore County and Baltimore City. The county and city had the highest and second-highest number of beneficiaries, respectively, in the state in December 2003.
Some Maryland residents echo Cardin’s concern.
“I know Social Security was not initially organized to be the main source of income for retirees, but more and more it has become so,” said Jannette Wundrow of Bowie, a retired teacher who has receive benefits for seven years.
Bush has promised that no one born before 1950 will be affected by the changes — a category that includes 66-year-old Wundrow. Still, she worries about what will happen to her benefits under Bush’s proposed plan.
It is because of concerns like Wundrow’s that the administration has been “delicate” with its proposals, Hederman said, making sure retirees and near-retirees know that they will not be harmed by the change.
But other experts say the administration has yet to reveal the full impact of its plan.
“So far they (administration officials) have tried to lead with the good news, and be very obscure about the bad news, which is: What are the benefit cuts?” said Kent Weaver, a senior fellow at the Brookings Institution.
Despite the risks, Weaver said the plan has some immediate political gain for the administration.
“Politically, I think they see an opportunity to appeal to younger voters . . . because they are a little bit more suspicious about whether the benefits are there,” Weaver said. He said many young do not think they will ever collect on Social Security, even though many reports say they will get at least a share of their money.
Weaver also said that Bush is willing to take the risk because he probably would like to have a “historical legacy of fixing the Social Security problem.”
But neither of those make it an easy move for the president or Congress.
“The administration is to be given credit for raising the issue because it is absolutely true that the system cannot be sustained indefinitely,” Weaver said.
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