Privatizing Social Security is akin to an organized run on the bank because the Social Security Trust Fund would be depleted by diverting payroll taxes into private accounts, according to Carroll Estes, PhD, UCSF professor of sociology and founding and former director of UCSF’s Institute for Health and Aging.
In a public lecture next week, Estes will present compelling information refuting the claims of those who propose to privatize Social Security. Her presentation will give details regarding those that will be affected the most.
The public lecture is Tuesday, February 15, from 7 to 8:45 pm at the UCSF Medical Sciences Building, 513 Parnassus Avenue, San Francisco. The fee is $17, with registration on site. For more information contact (415) 476-2557. The event is sponsored by the Osher Center Lifelong Learning Institute.
“Privatization of Social Security could have dire consequences,” Estes said. “Social Security is really a family plan that benefits all generations. It is the most successful anti-poverty program in the United States.” She noted that 38 percent of the people who receive Social Security benefits are not retirees, but younger disabled people, surviving children and widows.
Estes explained that prior to Social Security, approximately 35 percent of the elderly in the U.S. were poor; now that number has dropped to 9 percent. “Without Social Security benefits, 48 percent of the elderly in this country would be poor,” according to the Social Security Administration (SSA).
“There are simple solutions other than privatization,” Estes said. “One feasible alternative is to raise the wage cap for Social Security payroll taxes from $90,000 to $140,000. This would affect only the top 6 percent of U.S. earners, returning the percentage of wages covered to 90 percent as it was in 1983.”
Estes noted that rather than improving the solvency of Social Security, privatizing will only accelerate the trust fund shortfall which is now scheduled to occur in 2052, according a 2004 report from the Congressional Budget Office. “Privatization produces new costs of $2 to $15 trillion for transition. It will raise yearly program administration expenses from less than one percent, as it is under the SSA to 10 percent or higher,” she said.
Estes also cited polls that indicate young people, when explained the consequences, are overwhelmingly opposed to privatization.
Estes has joined with other academicians and researchers to found Concerned Scientists in Aging. More than 200 scientists from around the United States have organized to convey evidence-based information on Social Security privatization.
She is a member of the Institute of Medicine of the National Academy of Sciences, and past President of the Gerontological Society of America. She has served as a consultant to the U.S. Commissioners of Social Security and to the U.S. Senate and House Committees on Aging.