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Don't Privatize Social Security: AARP

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NU Online News Service, Dec. 30, 2004, 2:30 p.m. EST

The American Association of Retired Persons has advanced several proposals for reforming Social Security, some of which clash with proposals from the Bush administration.[@@]

The AARP, Washington, says it is opposed to the administration’s plan to place some Social Security funds into private accounts so that they might be invested in market instruments.

“Because less money would be flowing into Social Security, the guaranteed and inflation-adjusted lifetime benefits would have to be cut,” AARP asserted in a statement. “Maybe the investments in the account would make up the difference, and maybe they wouldn’t. Market returns can be attractive, yet they come at a risk.”

The association also said it supports strengthening the existing Social Security system in a number of ways, including investing part of its surplus so that it earns higher returns than offered by U.S. Treasury bonds; raising the cap on the amount of wages taxed to support Social Security from today’s $88,000 to about $140,000; and including all newly hired state and local government workers in Social Security.