Fact Sheet: Social Security

1. 47.5 million people receive Social Security benefits including:

• 33 million receive retirement benefits
  
• 7 million surviving spouses and children
  
• 8 million disabled workers and their dependents
  
• 57% of adult Social Security beneficiaries are women

2. Over 150 million American workers are earning Social Security coverage and paying Social Security payroll taxes.

Benefits
1. Social Security will pay an estimated $612 billion in benefits in 2004. The average monthly benefit for

• a retired worker will be $922
  
• a retired couple will be $1,523
  
• a surviving spouse will be $888
  
• a surviving spouse and two children will be $1,441

2. Almost all retired Americans receive Social Security benefits, which provides 38% of their total income. Employer pensions provide about 10% of the income of retired Americans. Most employer pensions are not indexed to inflation, which means their real value declines over time. The proportion of all retirees covered by an employer pension plan is declining. A growing number of retirees have income from assets, such as 401(k) accounts, but such income is subject to market fluctuations and is not guaranteed against inflation like Social Security benefits with the annual cost of-living adjustment (COLA). The 2004 COLA is 2.7%.

Social Security in 2004
Social Security will receive $679 billion in revenues in 2004. The amount of earnings taxed and credited for Social Security will be $87,900 in 2004 and will be $90,000 in 2005. About 84% of earnings in covered employment are now taxable, compared to 92% in 1937, and 90% as recently as the 1980s.

Trust Fund
The Social Security Trust Fund will have reserve assets of $1.71 trillion at the end of 2004. These reserves are invested in U.S. Treasury bonds. The government’s official actuarial estimates assume the national economy will perform less well over the next 75 years than it did over the past 75 years and therefore project a long-term Social Security financial deficit. The government’s official estimates for Social Security are historically more pessimistic about the future of the American economy than the estimates the government uses to project Federal budget revenues and expenditures. In March 2004, the Social Security Board of Trustees announced that the Trust Fund can pay full benefits through 2042 the same as predicted last year. The Congressional Budget Office projects that Social Security will be solvent even longer - to 2052.

Social Security and Poverty

• Social Security provides at least half of the total income of 64% of aged beneficiaries, and is the only source of income for 20% of the aged.
• Without Social Security, nearly half of aged beneficiaries would be in poverty.
• The poorest Social Security beneficiaries are generally older women, particularly minority widows.

Alliance Position
The Alliance opposes establishing individual investment accounts as a substitute for future guaranteed Social Security benefits. The Alliance opposes the recommendations of the 2001 President's Commission to Strengthen Social Security, which made three proposals to privatize Social Security.

The Alliance supports strengthening and improving the current Social Security system. The Alliance concurs with the recommendations of the Social Security Advisory Board to provide adequate funding for the Social Security Administration to improve its level of service to the public, and to exclude the agency's administrative budget from the arbitrary discretionary spending cap in the federal budget.

The Alliance supports reform by Congress of the Social Security Government Pension Offset and Windfall Elimination Provision, which unfairly penalize public sector employees by reducing Social Security benefits in direct proportion to their public sector pensions.