[Congressional Record (Bound Edition), Volume 148 (2002), Part 8]
[House]
[Page 11254]
[From the U.S. Government Publishing Office, www.gpo.gov]




                WOMEN AND SOCIAL SECURITY PRIVATIZATION

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Florida (Mrs. Thurman) is recognized for 5 minutes.
  Mrs. THURMAN. Mr. Speaker, as part of my continuing series on Social 
Security and women, I would like to focus this evening's comments on 
the financial risks that I believe are posed by privatizing the Social 
Security program.
  Social Security privatization would expose individual workers and 
their families to financial risks which they do not face under the 
current system. Under privatization, Social Security benefits would no 
longer be determined primarily by a worker's earnings and the payroll 
tax contributions she made over her career. Rather, benefit levels 
would be determined by the vagaries of the stock market, by a worker's 
skill, or just plain luck in making investments, and by the timing of 
his or her decision to retire.
  Social Security today provides a guaranteed lifelong benefit. No 
matter what the stock market does the day one retires or in the months 
leading up to retirement, our benefit will be unaffected. Advocates of 
individual accounts argue that, since fluctuations in the stock market 
average out over time, individual investment risk is negligible. 
Averages are misleading. For every person whose investments perform 
above average, there is another person counting on Social Security 
whose investments perform below average. Retirees are not just 
averages; retirees are individual people.
  Between March, 2000, and April, 2001, the S&P 500 fell by 424 points, 
or 28 percent. If Social Security had been privatized, a worker who had 
his or her individual account invested in a fund that mirrored the S&P 
500 and who retired in April of 2001 would have 28 percent less to live 
on for the rest of his or her life.
  There were 15 years in the past century, 1908 to 1912, 1937, 1939, 
1965 through 1966, 1968 through 1973, in which the real value of the 
stock market fell by more than 40 percent over the preceding decade. 
That is from the CBO, the Congressional Budget Office.
  Social Security protects against many risks, including the risk of 
death or disability, the risk of low lifetime earnings, the risk of 
unexpectedly long life, and the risk of inflation. Privatization 
undermines these protections and adds one more risk that workers would 
have to worry about: individual financial risk.
  Because of a number of factors, women are more likely than men to be 
negatively impacted and affected by these financial risks. Women tend 
to outlive their husbands by an average of 7 years. Reductions in 
Social Security payments due to lack of funds would leave stranded many 
women without their husband's Social Security income. And because they 
live longer than men, women are at a greater risk of running out of 
money in their private account.
  Women take time out of their work life to care for children and 
elderly parents. Under a system of private accounts, they would pay 
less into their accounts and have less to draw down on when they 
retire.
  Mr. Speaker, privatizing the Social Security program in my estimation 
poses unneeded financial risks, both on the seniors that have paid into 
Social Security with their hard work, and those young people just 
entering the workforce. And women would face the greatest risk of all 
under a privatized Social Security system.

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