For Immediate Release
Monday, March 19, 2001
Trustees Say Social Security Still Strong
But Enormous Tax Cuts Could Threaten Its Future, AFSCME Warns
Washington, DC —The American Federation of State, County and Municipal Employees, AFL-CIO, called the continued improvement in Social Security's long-range health announced in today's Social Security Trustees' report good news. At the same time, the massive tax cuts proposed by the Bush administration could throw the highly successful system into jeopardy, AFSCME cautioned.
According to the trustees, the system will be fully solvent and able to pay all benefits until 2038 — a year longer than the 2000 report projected and nine years longer than estimated in the 1997 report. The trustees continue to see a 25 or 30 percent shortfall for the system after 2038, but even this long-range forecast is slightly improved, amounting to 1.86 percent of covered payroll over 75 years, up from 1.89 percent in 2000 and 2.29 percent in 1997.
"We now have further proof that the system's critics are way off the mark with predictions of gloom and doom," said AFSCME President Gerald W. McEntee. "The Trustees' report has reinforced our view that Social Security does not need dramatic changes such as unreliable, individual investment accounts when the current system has worked so well for 60 years."
McEntee noted, however, that the system's projected long-range shortfall — though a manageable problem — must be addressed.
"Budget surpluses give us a historic opportunity to resolve the situation, as long as we don't blow it with a gigantic tax giveaway to the wealthiest one percent of Americans," he said. "Right now, the future of Social Security and Medicare should be bigger priorities."
The Trustees also examined Medicare's future. While they found the system fully solvent until 2029, they recognized that the aging population and the growing cost of medical services will inevitably lead to a shortfall down the road.
"If we use up nearly all of the budget surpluses on a massive tax cut as the Administration wants to do, the money will not be there to sustain Medicare, much less provide an affordable prescription drug benefit under Medicare for those who need it," Mr. McEntee added.
