Bill Text: TX HCR34 | 2011-2012 | 82nd Legislature | Introduced
Bill Title: Urging the United States Congress not to privatize the social security program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-02-18 - Referred to Appropriations [HCR34 Detail]
Download: Texas-2011-HCR34-Introduced.html
| 82R3346 BPG-D | ||
| By: Raymond | H.C.R. No. 34 | |
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| WHEREAS, When U.S. stock market indexes plunged in 2009, the | ||
| value of American retirement accounts was shrunk by half; millions | ||
| of older Americans now face diminished prospects for a comfortable | ||
| retirement and are more dependent than ever on the safety net | ||
| provided by our social security system; and | ||
| WHEREAS, Before passage of the Social Security Act of 1935, | ||
| economic hardship threatened many elderly Americans; now, only | ||
| about 10 percent of the elderly fall below the poverty line; nearly | ||
| 90 percent of those 65 and older receive social security benefits, | ||
| without which almost half of them would have incomes below the | ||
| poverty line; and | ||
| WHEREAS, Social security is the most successful domestic | ||
| program in the nation's history, yet the last presidential | ||
| administration sought to dismantle it through privatization; this | ||
| rejected proposal has resurfaced in Congress in the guise of H.R. | ||
| 4529, the Roadmap for America's Future Act of 2010, which would | ||
| weaken the solvency of the social security trust funds by allowing | ||
| workers under the age of 55 to divert a portion of their payroll | ||
| taxes to individual investment accounts in exchange for smaller | ||
| guaranteed social security benefits; and | ||
| WHEREAS, This measure would undermine the economic security | ||
| of the elderly, especially that of the least well-off, for whom | ||
| social security provides nearly 80 percent of income in retirement; | ||
| moreover, permitting current contributors to channel funds out of | ||
| the general social security fund would exacerbate the shortfall in | ||
| revenues for current retirees as well as for current and future | ||
| recipients of disability or survivors insurance payments, and it | ||
| would ultimately require large increases in federal borrowing; and | ||
| WHEREAS, Traditional social security benefits provide a | ||
| guaranteed, predictable source of retirement income, indexed for | ||
| inflation, but any savings in private accounts would be subject to | ||
| the volatility of investment markets; in addition, even if workers | ||
| could convert their private accounts into an annuity at retirement, | ||
| it is unlikely that they could purchase one that protects against | ||
| inflation; and | ||
| WHEREAS, Privatization has proven disastrous in a number of | ||
| other countries; in Great Britain, it brought enormous | ||
| administrative costs that devoured some 40 percent of the return on | ||
| investment; unscrupulous brokers preyed on unsophisticated | ||
| investors, and the basic pension shrank dramatically, throwing many | ||
| retired citizens into poverty; in Chile, transition costs, | ||
| commissions, and other administrative expenses siphoned so much | ||
| value from investment accounts that more than 40 percent of those | ||
| eligible to collect were forced to continue working; and | ||
| WHEREAS, Administrative costs for flexible private accounts | ||
| in the United States would be much higher than the very low | ||
| operating costs of social security today; moreover, the government | ||
| would need a new bureaucracy to track the myriad small investment | ||
| accounts belonging to individual taxpayers; the high cost of | ||
| establishing the new accounts would further weaken social | ||
| security's long-term finances and require some combination of | ||
| federal borrowing, tax increases, and benefit cuts; and | ||
| WHEREAS, The privatization of social security would be a | ||
| hugely complicated and costly process, fraught with potential | ||
| disaster for even the most savvy investors; since most employers | ||
| today offer defined contribution plans, such as 401(k)s, rather | ||
| than defined benefit plans, retiring workers are already | ||
| dangerously exposed to market risks; stocks, commodities, and real | ||
| estate have fluctuated more precipitously over the past decade, and | ||
| most Americans can ill afford to exchange social security's | ||
| guaranteed minimum retirement income, indexed to the rate of | ||
| inflation, for a chance to roll the dice in the financial markets; | ||
| now, therefore, be it | ||
| RESOLVED, That the 82nd Legislature of the State of Texas | ||
| hereby respectfully urge the United States Congress not to | ||
| privatize the social security program; and, be it further | ||
| RESOLVED, That the Texas secretary of state forward official | ||
| copies of this resolution to the president of the United States, the | ||
| president of the Senate and the speaker of the House of | ||
| Representatives of the United States Congress, and all the members | ||
| of the Texas delegation to Congress with the request that this | ||
| resolution be entered in the Congressional Record as a memorial to | ||
| the Congress of the United States of America. | ||
