WHEREAS:
AFSCME has long opposed diverting Social Security payroll contributions away from the traditional social insurance system -- where benefits are guaranteed by the "full faith and credit" of the federal government -- to fund risky retirement investment accounts; and
WHEREAS:
President Bush has advocated the privatization of the Social Security program and appointed a commission in 2001 that recommended three plans, all of which would destroy the present program by permitting workers to divert a portion of their payroll contributions to private investment accounts; and
WHEREAS:
These privatized accounts are not only risky, but would also require $2 to $3 trillion in transition costs by 2040 -- additional money that would have to be added to the trust fund so the system could make promised payments to current beneficiaries while establishing investment accounts for younger workers; and
WHEREAS:
The commission plans clearly state that guaranteed benefits would be reduced in direct relation to the amount of payroll contributions a worker diverts to an individual account, and that big infusions of general revenue would be required in order to cover transition costs; and
WHEREAS:
The three plans featured other onerous cutbacks, including a provision to index benefits to inflation rather than wages -- the latter being the more generous and currently-used method -- and another that would link the formula for guaranteed benefits to life expectancy, which would require people to work longer for the same benefits they would receive at a younger age today; and
WHEREAS:
All the required benefit reductions would apply to disability and survivor benefits as well as to retirement benefits; and
WHEREAS:
The official 2003 report of the Social Security trustees, made up of President Bush's top cabinet officers, clearly states that the system will be able to pay all promised benefits until 2042, after which Social Security will experience a shortfall, but will still be able to cover 75 percent of promised benefits far into the future; and
WHEREAS:
The future shortfall is significant but manageable, and can be corrected without the drastic changes the commission recommends -- changes that would actually worsen Social Security's finances, as privatization's transition costs use up Trust Fund monies and cause the shortfall to appear many years earlier than now projected; and
WHEREAS:
Approximately 25% of public employees and retirees are from jurisdictions that do not participate in Social Security and rely solely on their state and local government pensions; and
WHEREAS:
Some proposals for Social Security "reform" have included mandatory Social Security coverage for all of these public jurisdictions, even though the income it would produce for Social Security would add less than two years to the additional solvency of the trust funds and incur millions in future obligations for the system; and
WHEREAS:
Mandatory coverage for future hires would cost states and localities an estimated $5 billion per year and would ultimately result in destabilized pension funds for current public employees and retirees, two-tier pension systems with reduced future benefits, and a push by state legislatures to replace strong defined benefit pension plans with risky defined contribution plans; and
WHEREAS:
The same public employees and retirees in non-participating jurisdictions are currently subjected to two unfair pension offsets, required under the federal Social Security Act; and
WHEREAS:
The government pension offset virtually eliminates Social Security spousal and survivors benefits for these public pensioners -- a particularly harsh penalty for thousands of low-pension women; and
WHEREAS:
The windfall elimination provision is the second pension offset affecting these public employees and retirees, significantly reducing the Social Security benefits they earned themselves through other jobs; and
WHEREAS:
These two offsets were enacted by Congress on an arbitrary basis and do not penalize private sector pensioners who are able to collect full pensions and full Social Security benefits.
THEREFORE BE IT RESOLVED:
That AFSCME rejects President Bush's plans to privatize the Social Security program and the recommendations of his Social Security Commission; and
BE IT FURTHER RESOLVED:
That AFSCME reiterates its opposition to carving out private investment accounts from Social Security, and reaffirms its faith in Social Security as the risk-free foundation of retirement income for most American workers and the nation's premier system of income protection for America's working families; and
BE IT FURTHER RESOLVED:
That AFSCME opposes any effort to cut benefits or increase eligibility thresholds, opposes any effort to remove local medical input form the Social Security disability determination process, opposes any effort to use trust fund surpluses for tax cuts, and supports efforts to consider increases in employers' tax rates and the payroll tax earning cap as a progressive method to strengthen the Social Security system and insure long term financial stability; and
BE IT FURTHER RESOLVED:
That AFSCME will demand, prior to the November elections, that all presidential and congressional candidates state their position on whether they support the privatization of the Social Security program so that every voter will know where they stand on the future of Social Security; and
BE IT FURTHER RESOLVED:
That AFSCME opposes all proposals for mandatory Social Security coverage in public jurisdictions that currently do not participate; and
BE IT FINALLY RESOLVED:
That AFSCME supports the enactment of federal legislation to repeal or at least significantly modify Social Security's government pension offset and windfall elimination provision.
SUBMITTED BY:
Alice Goff, President and Delegate
AFSCME Council 36
CaliforniaDavid Rader and Delegate
Juan Martinez, President
AFSCME Local 843, Council 28
Washington