Social Security:
A Discussion Among Generations

Paraphrased notes from the meeting
Hosted by the UAA Economics Club and Commonwealth North
The Consortium Library
March 29, 2005

Head table: U.S. Senator Lisa Murkowski, UAA Chancellor Elaine Maimon, Commonwealth North President Jon Kumin, UAA Economics Club President Kathleen Ahern-Karnes

Senator Murkowski: I sat next to a gentleman on the plane who lives in Juneau, who is aware of my speaking at UAA. We had a dialogue about my desire to get a mix of ages together to discuss Social Security. He didn't understand the importance of involving younger people. Young people need to look at Social Security as a retirement option. Young people don't believe that system will work for them because some think Social Security won't be available for them. Young people need to participate in the conversation about Social Security.

We are not here today to debate merits of different plans, but rather how has it worked for those who have been recipients, what is the expectation of future recipients, what approach should we consider? What should and shouldn't be taken out of the Social Security plan? What are the issues as
you perceive them?

Lance Kaufman (student): There is not a lot of information about Social Security available; there is a lot of propaganda. What are the real issues? What are the main concerns and where are the opportunities for compromise? I am concerned about efficiency. How do we save money; decrease bureaucracy? What is the compromise? How do older populations view the issue? What is the main goal? How will we come to a successful consensus, rather than continuing the debate?

Senator Murkowski: We are not even close to consensus. In terms of expectations: do young people view this as a system that offers anything to them, rather than only being for their grandparents? The gentleman on the plane didn't think it would be there for him when he retired.

Mr. Kaufman: I pay into it, and see the deduction, but don't see it as anything that I will receive later. There is no ownership of the money that is being taken out of my check. There is no connection as to why I'm paying.

Audience member (student): People are not educated on how to save. In addition, what is happening to the surplus of funds? I have benefited from Social Security, so it is hard to be judgmental, but I don't think it is fair to have people give into the surplus, but when they need it, it isn't there.

Senator Murkowski: Money that you have earned, don't you think that you have some right or call on that money? How do we make sure that you ultimately receive it?

Audience member (student): I have IRAs and other accounts, but a lot of people don't know how to do that. Where is the compromise? Everyone has their own answer, but I don't think that one answer is the right thing. Anyone else would recommend you invest in multiple things, not just one. Invest in America by investing in a few different places. We can't come to a consensus as long as people hang on to that one thing that they think will make it work. Maybe there are a few things we can do, not just one.

Alden Todd (senior): I remember when the first checks were handed out. 1.2.1940. The average monthly payment was $23/mo which was a useful gap closure back then. I remember early discussions of Social Security, of who will be covered. Employers used to fight to NOT pay 1% Social Security for their employees and are now required to pay 6.2%. We need to adjust the amount paid into the fund and out to the recipients. Let's not talk about the system being on the brink of collapse or bankruptcy; the system needs to have adjustments made.

Audience member (94-year-old): There are two things that are important at my age: my retirement money and Social Security. Social Security is an add-on, but not the most important. If you want to be happy when you are old, have good retirement income. I would like to do more (such as travel) but it costs money. Social Security should not be the big item in your life. Separate retirement money is what is important.

Senator Murkowski: (discussion of increases of Social Security taxes over years-twenty times). Social Security should not be your only source of income, and I would like to think we are all working to establish accounts that will help us as we get older. Many Americans do not establish such accounts, more through ignorance, or lack of income, rather than by choice.

Heather Flynn: I was one of the people 40 years ago who invested in all possible avenues because I assumed that Social Security would not be there for me. My biggest concern is the debt and how we pay for it. We ought to work with the debt with all programs, not just Social Security. I do not support the two tax cuts nor do I believe there should be an elimination of the estate tax.

Senator Murkowski: How do you fund the transition from debt to surplus? The numbers are quite astronomical. If we borrow, then we place the obligation on the younger generation.

Audience member (49 years old): It helps to know where we have been in order to know where we will go. What does olive oil have to do with Social Security? During the Greek era, olive oil was used as barter because of long shelf life. That was their insurance of the day. There have also been three schools of thought throughout history: Do nothing philosophy, H. Hoover volunteerism, FDR: social insurance. We know we can't rely totally on Social Security, not everyone can rely on that. Are we teaching our children the wrong saving techniques?

Liz Vasquez: It is extremely difficult for low-wage individuals to save. My concern is that there will always be a need for low-wage earners, who are most at risk for this coverage. If you have worked all your life, and have saved, you can still be struck by catastrophic disasters. Dealing with a low socio-economic group, I object to a higher retirement age. There should be incentives for seniors who are working, because of decreasing mental or physical stamina. I endorse tax breaks to lower income workers. Adjust the income cap (currently at $90,000). We need to have incentives for retirement accounts. To some, Social Security means the difference between having food and shelter or not. Also, we need to decrease the misuse and abuse of Social Security.

Senator Murkowski: It is important to speak to the most vulnerable population because Social Security is a safety net for many with low incomes.

Dr. Milton Byrd (senior): I remember when Social Security started during the Great depression. The basic purpose of Social Security wasn't to provide people with a comfortable retirement, it was to keep people from falling into abject poverty. 70 years have passed and things have changed. We need a radical transformation, need to start over. We need to ask ourselves what is it that we can do to support those people who need help in their twilight years? Every time a youngster is born, the government should contribute money into an account for them and continue to invest over time.

William Large (mid 30, Legal Counsel for the Republican Party of Alaska): Most people in their 30s are disgusted with the system, have invested for a long time and see no return. Social Security projects for me a negative income. I don't want my kids to be reliant on Social Security, PELL grants, etc. Personal retirement accounts are an excellent idea. Have multiple funds. Government workers don't contribute to Social Security, don't have to. Give people an opportunity to invest the way that they want to, do not force them to invest in Social Security. Make us save, don't take it and use it to pay for government.

Audience member: If the 20somethings and 30 somethings knew what we were doing to them, they would march on Wall Street with pitchforks and torches. We need to get back to what we are trying to reach a consensus on. What do the younger, middle aged and older populations want the system to do? It is hard to come up with a solution if we do not know what the objectives are. What are the problems with the system? What is relevant is the ability of the economy to sustain fluctuation. 3 issues: accounting (money coming out without going back in), cash flow problem (using Social Security $ to fund government), and equity (who is it fair to? Participants, or non-participants?).

Senator Murkowski: What is the debate about? It means different things to different groups of Americans. That is what makes it difficult to achieve consensus. We haven't defined what we want Social Security to be for the next generation.

Audience member: Take a page out of people who are trying to simplify the situation. It is complicated and there are many issues within the one. What is the function and what is should the structure be to meet those functions?

Pat Luby (AARP): Things to consider are natural catastrophes that can happen at any age. It is a social insurance program, not a social retirement program. 33% of AK recipients are not of retirement age.

Audience member: We talk about the working poor, then we discuss the 600% increase that we have made. We take their money, which ensures that they have no funds, and no survivor benefits.

Audience member (student): It's nice to know that Social Security will be there for me. It's nice to allocate how my money is working. Give a child a lump sum, and they don't have to put that much money in as they get older.

Senator Murkowski took a poll of the audience:

Senator Murkowski: I need to hear from all Alaskans. This will be a very difficult task to reach consensus.

The 2005 Social Security discussion at the Consortium Library
may be reproduced but credit must be given to
Commonwealth North.

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