Dunn, Hardy idea for Social Security no good

Jennifer Dunn and Dorcas R. Hardy got one thing right in their opinion piece on Social Security in Wednesday's Post-Intelligencer: The system could be improved to work even better for American women.

However, the restructuring that Dunn and Hardy suggest would slash benefits and cost more than $1 trillion. Privatizing Social Security is precisely the wrong approach for women and all Americans.

Social Security is a great American success story. Poverty among seniors has fallen to less than 10 percent, compared with 35 percent as recently as the 1950s. Social Security also provides a stable income to millions of younger families that have suffered the death or disability of a worker.

More than 3 million children collect benefits, including at least 2,300 children whose parents were killed in the Sept. 11 terrorist attacks.

Social Security works well for all Americans, but especially for women. Benefits are guaranteed, and are determined by earnings and need. A child care worker whose lifetime earnings averaged $14,000 a year would collect a benefit totaling 57 percent of that amount, while an engineer with earnings averaging $80,000 would receive 23 percent of that working wage in benefits.

Social Security pays additional benefits for additional family members, and survivor benefits to widows. These features help offset the fact that women still lag behind men in earnings, and more often choose to take time out of the workforce to care for family.

Social Security pays guaranteed benefits to seniors for life, with annual automatic cost-of-living raises. Today women outlive men by 5.6 years on average. Women represent 58 percent of all seniors collecting benefits, and 71 percent of beneficiaries over age 85. The longevity gap is expected to continue, making these guarantees particularly important to women.

Finally, only 38 percent of women have an employer-sponsored retirement plan, compared with 57 percent of men. Women also typically have less accumulated in their accounts because of lower earnings. Not only are today's senior women far more dependent on Social Security than men, but younger women are likely to be in the same boat when they retire.

Privatizing part of the system would reverse all the advantages of Social Security's insurance protections. If workers invest in individual accounts, guaranteed benefits would have to be cut.

Benefits for spouses, widows and disabled workers would be jeopardized. You cannot outlive your Social Security, but you can live longer than the funds in a private account. Women, who frequently earn less, live longer and rely more heavily on family, survivor and disability benefits, would suffer. Women of color would be most severely affected. And since today's benefits are paid with today's payroll taxes, we would have to raise more than $1 trillion in new taxes to finance the transition to that new system, a fact Dunn and Hardy neglect to mention.

Social Security isn't broken. Dunn and Hardy claim that Social Security is not sustainable, but the latest trustee's report shows that it is. Even if our economy just limps along for the next 40 years, we'll be able to pay full and increasing benefits that entire time. Fewer workers will be able to sustain more retirees as the 21st century progresses because of productivity increases, just the way fewer farmers can feed us now than decades ago.

Given the health of the present system, we should focus on solving our real problems. While few seniors now live in poverty, thanks to Social Security, too many live precariously close to that line.

Several minor reforms would help low-income seniors live in modest comfort, and still keep Social Security strong for our children and grandchildren.

We could adjust the benefit formula to increase incomes of the lowest earners. We could change survivors' benefits so that elderly widows and widowers receive three-fourths of the couple's benefit instead of the two-thirds or less they get now. We could provide credits to workers who care for a family. And we could develop new and secure opportunities for all workers to save and invest for retirement above and beyond Social Security.

Social Security is successful and builds the kind of America most of us want, where we ensure that everybody can live in dignity in old age or after a family tragedy. Social Security is a legacy we must leave to our children and grandchildren.

Marilyn P. Watkins, Ph.D., is economic security policy director for the Economic Opportunity Institute. Contributing to this article are Linda Tosti-Lane, president of the Washington State National Organization for Women, and Judy Hollar, public policy chairwoman of the American Association of University Women of Washington.

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