As the nation debates on ways of strengthening Social Security and making it sustainable for future generations, the NASE stands for:

• opposing further payroll tax increases or tax inequities for the self-employed;

• avoiding any change in promised benefits to current and near retirees;

• maintaining a “minimum benefit” safety net for all retirees;

• reducing the huge unfunded liabilities for the Social Security system; and

• permitting individuals to voluntarily allocate a portion of Social Security taxes to personal retirement accounts.

The NASE supports the proposal to allow individuals to personally invest a portion of their Social Security payments in carefully regulated accounts, similar to IRAs. The NASE opposes the government investment option, which would put large pieces of the private sector under the control of government.

The NASE favors leaving the basic “social safety net” in place, financed with the remainder of the taxes and believes the current structure of Social Security must be kept in place for current beneficiaries. But the highly discriminatory Social Security tax system, which is one of the major barriers to self-employment in the United States, must be addressed. The NASE will vigorously oppose any change to Social Security that worsens the current tax inequities for the self-employed.

Background:
Social Security is a necessary and successful program that has helped provide dignity in retirement to millions of Americans and must be protected. In 1945, 20 workers supported each Social Security beneficiary. In 1999, about three workers support each Social Security beneficiary. Today's average life span is just over 76 years and most people are collecting Social Security benefits for more than 10 years. By 2020, roughly two workers will support each retiree and the average recipient will live to be about 80 years old.

Insolvency is the prominent problem the Social Security System faces. The system will run deficits by about 2012 and would be completely insolvent by 2032. The lack of private benefits, coupled with a weak national savings rate, compel millions to rely on Social Security for the bulk of their retirement income.

Legislative Activity:
In the 109th Congress, both the Republicans and Democrats have made Social Security reform one of their top ten legislative priorities. The Bush Administration will be making reform of the system their top priority.

In 2001, President Bush announced establishment of a bipartisan, 16-member Commission (http://csss.gov/) to study the current Social Security system and issue a report with specific recommendations to preserve Social Security.

As stated by the U.S. Social Security Administration, the Social Security Commission has been asked to utilize six guiding principles to restore financial solvency to the Social Security system:

• Modernization must not change Social Security benefits for retirees or near-retirees.

• The entire Social Security surplus must be dedicated only to Social Security.

• Social Security payroll taxes must not be increased.

• The government must not invest Social Security funds in the stock market.

• Modernization must preserve Social Security's disability and survivors insurance programs.

• Modernization must include individually controlled, voluntary personal retirement accounts, which will augment Social Security.

The 16-member Commission consists of eight Republicans and eight Democrats, with a member from each party serving as a co-chair. The co-chairs are former Sen. Daniel Patrick Moynihan and Richard Parsons, Chief Operating Officer of AOL/Time Warner.

The final report of the Commission included three reform models, all of which proposed establishing personal accounts within the context of the Social Security system.

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