MIDDLETOWN – Congresswoman Rosa DeLauro (Conn.-3) today hosted a discussion at Middlesex Community College to describe how proposed changes to Social Security will impact young workers, current and future retirees. David Datelle, an economist and public policy analyst, and College President Wilfredo Nieves, EdD., joined DeLauro at the event.

“Young people have more at stake in this debate than anyone,” DeLauro told the crowd. “The changes being discussed in Washington will not only impact your retirement, but your whole family. Social Security is not only a safety net for older Americans, but a kind of family insurance guaranteeing that we can live our own lives and raise our own children, confident that our parents and loved ones will maintain their dignity and independence in retirement.”

President Bush has suggested privatizing Social Security by diverting a third of payroll taxes into private accounts that can be invested in the stock market – the proposal does not address the expected funding shortfall in the current Social Security system. “By taking money out of the trust fund to invest it in the stock market, the proposal makes the problem worse,” DeLauro said. “Under the president’s proposal, we will still have to pay benefits to current retirees at the same time we are taking money out of the system to invest in the stock market, causing the deficit to explode by another $2 trillion in the first decade alone.”

One plan suggested by the President's Commission on Social Security would cut future benefits by 45 percent for children born today, even after possible gains from private accounts were taken into consideration, according to the non-partisan Congressional Budget Office. Under this plan, a young worker today would lose about $152,000 in benefits under the leading privatization plan. Additionally, the average private account would be taxed at 70 percent through monthly deductions from Social Security checks. This “privatization tax” would come on top of the benefit cuts that will affect all Social Security beneficiaries.

“The program faces challenges, but is not in a crisis, as the Administration has suggested,” said DeLauro. “Social Security connects one generation to the next, which is why any changes Congress makes to Social Security today should strengthen it for future generations.”

DeLauro suggests that Congress address the Social Security challenge by using a model similar to that used in 1983, when bankruptcy was only a year off. That year, Congress and President Reagan worked together on a bipartisan commission that ensured Social Security would be solvent for generations by making minor adjustments to the benefits and financing structures, not by changing the fundamental nature of the program.

Nearly 120,000 residents of the Third District rely on Social Security, almost 9,000 of them children. About 30 percent of Social Security beneficiaries receive disability or survivor benefits. For a 27-year-old worker with a spouse and two children, Social Security provides the equivalent of a $403,000 life insurance policy and a $353,000 disability insurance policy.