Congressman Olver began by explaining Social Security's history as an "Anti-Poverty Insurance for Families." "From a family point of view, you could view this as sons, grandsons, granddaughters and daughters putting money in from the jobs that they had to make certain that their parents or grandparents would have a guaranteed income in their retirement," he explained. "Each generation in its turn would move up the line and have the payments going in from the payroll tax [which in turn would be] providing for the guaranteed income to make certain their parents and grandparents would not be living in poverty."
Although Social Security initially targeted reducing poverty for retirees, over the years the system reformed to include other beneficiaries. Presently, only 69 percent of those receiving Social Security benefits are actually retirees. Seventeen percent of recipients are disabled workers and their families, while 14 percent are surviving spouses and minor children.
Olver advocates for Social Security serving as an anti-poverty program. He noted that when Social Security was created in 1935, roughly 60 percent of seniors lived in poverty. In 2005, the number of seniors living in poverty has dropped to 10 percent. "This has been a most effective program for reducing poverty," Olver said.
Olver rejected Bush's recent allegations that Social Security is in dire crisis. Bush stated that starting in 2012, the first year that baby boomers will reach retirement age, the nation will have more benefiting retirees than workers paying Social Security. "The crisis, as the President sees it, is that the total reserve begins to fall," said Olver. He said the President has not mentioned that the yearly surplus does not begin to fall until 2027, after which it will decline rapidly.
Social Security has faced serious crises in the past such as in 1983 when President Ronald Reagan along with bipartisan congressional leadership agreed to make changes to keep Social Security solvent for the next 59 years-until 2042. "The crisis was that we had already had eight successive years in which the reserve had gone down," explained Olver. "Half of the reserve had been used up. The system would have run out of reserve by 1991. The crisis is nowhere near as serious now as it was in 1983. We are, in fact, at least 31 years away from when the reserves will be used up."
Olver disagrees with what he views as the President's recent hasty push to reform Social Security. "We have time to think this thing through carefully, and think how we want to protect and preserve Social Security as a base of income as a poverty insurance system," said Olver.
Olver went on to outline what he thinks are problems with the President's Privatization Proposal. He claimed that Bush's plan cuts guaranteed benefits, diverts one-third of total payroll taxes to private accounts, increases national debt and does not address the issue of solvency.
Banda spoke after Olver about AARP's views on reforming Social Security. "Social Security is strong," she said. "Instead of a major overhaul of the system it just needs some fine tuning." Banda reminded students that Social Security is the only concrete financial protection for senior citizens. "Social Security is your only source of income when you retire that you cannot outlive and that cannot be eroded by inflation," she said. "Private accounts are not the answer. Private accounts should be in addition to Social Security, not in place of it."
Joe Tringali, Director of Services at the Stavros Center for Independent Living, spoke briefly after Banda about his experience working with disabled persons, many of whom rely solely on Social Security for medical assistance and living funds.
Students were grateful for the opportunity to learn how the Social Security system works. "I really did not know much about Social Security to begin with," said Laura Taylor '08. "I already thought that Social Security was an important institution, but now I have a better idea of why that is and what exactly it does."
Many audience members were interested in learning about the two opposing arguments the Social Security debate. "I would enjoy seeing a similar presentation from someone on the other side of the debate," said Caitlin Shaw '07. "Social Security may not seem like a very interesting topic for people our age, but there is no doubt that any steps taken to change Social Security are going to have a major impact on our generation."
Zachary Mason '08 agreed that more students should attend lectures pertaining to government policies that may affect their lives. "Amherst students should spend their free time going to lectures like this no matter how politically apathetic they are, because unlike the "O.C." or Halo, any changes to Social Security will actually pertain to their lives," he said.