SENIOR SENATE FEDERAL PROPOSAL NO. 10

INTRODUCED BY SENIOR SENATOR LEVY

(COAUTHOR: SENIOR SENATOR ERMAN)

(COAUTHORS: SENIOR ASSEMBLY MEMBERS AGOR, BOUER, BOYCE, MEADE, AND WELCH)

LEGISLATIVE COUNSEL'S DIGEST

SFP 10:  FEDERAL SOCIAL SECURITY.

EXISTING LAW, THE FEDERAL SOCIAL SECURITY ACT, PROVIDES FOR BENEFITS FOR ELIGIBLE BENEFICIARIES, FUNDED PRIMARILY BY FEDERAL PAYROLL TAXES ON WORKERS AND EMPLOYERS.

THIS MEASURE WOULD MEMORIALIZE THE CONGRESS AND THE PRESIDENT TO ENACT LEGISLATION THAT WOULD ADOPT A POLICY STATEMENT DECLARING OPPOSITION TO THE PARTIAL OR TOTAL PRIVATIZATION OF THE FEDERAL SOCIAL SECURITY SYSTEM.

VOTE: MAJORITY.

SFP 10: RELATING TO FEDERAL SOCIAL SECURITY

WHEREAS, THE ENACTMENT OF THE FEDERAL SOCIAL SECURITY ACT IN 1935 MADE SOCIAL SECURITY - ALSO KNOWN AS OLD AGE, SURVIVORS AND DISABILITY INSURANCE - A
CORNERSTONE OF PUBLIC POLICY ADDRESSING THE NEEDS OF MANY DISPOSSESSED AMERICANS, RETIRED INDIVIDUALS AND THEIR FAMILIES, PERSONS WITH DISABILITIES AND THEIR FAMILIES, AND SURVIVING SPOUSES AND CHILDREN OF DECEASED WORKERS; AND

WHEREAS, SOCIAL SECURITY BENEFITS ACCOUNT FOR HALF OR MORE OF THE INCOME OF TWO-THIRDS OF PEOPLE 65 YEARS OF AGE AND OVER; AND

WHEREAS, SOCIAL SECURITY IS CONSIDERED TO BE THE PRIMARY REASON FOR THE DRAMATIC DECLINE IN POVERTY IN THE UNITED STATES AMONG THE ELDERLY DURING THE TWENTIETH CENTURY, FALLING FROM 35 PERCENT TO 10 PERCENT BETWEEN 1960 AND 1995 AMONG THOSE 65 YEARS OF AGE AND OVER; AND

WHEREAS, THROUGHOUT THE STATE OF CALIFORNIA, SOCIAL SECURITY BENEFITS WERE PAID TO OVER 4 MILLION PERSONS IN DECEMBER 2003, INCLUDING 2,809,413 RETIRED WORKERS, 413,929 WIDOWS AND WIDOWERS, AND 501,137 DISABLED WORKERS - 3,181,358 PERSONS RECEIVING BENEFITS IN OUR STATE DURING THE MONTH OF DECEMBER 2003 WERE 65 YEARS OF AGE AND OVER; AND

WHEREAS, THE SOCIAL SECURITY SYSTEM IS IN NEED OF ADJUSTMENTS BASED UPON PROJECTED CHANGES IN DEMOGRAPHICS SUCH AS THE BABY BOOMER GENERATION, THE INCREASE IN LONGEVITY, AND CHANGES IN THE WORKER-DEPENDENT RATIO; AND

WHEREAS, PROPOSALS ARE BEING CONSIDERED IN WASHINGTON, D.C. THAT WOULD PARTIALLY PRIVATIZE SOCIAL SECURITY, PAVING THE WAY FOR CHANNELING SOCIAL SECURITY PAYROLL TAXES INTO PRIVATE MARKET ACCOUNTS AND FINANCIAL MARKETS; AND

WHEREAS, UP TO TWO TRILLION DOLLARS ($2,000,000,000,000) WILL BE BORROWED DURING THE FIRST 10 YEARS TO REPLACE LOST REVENUE DIVERTED TO PRIVATE MARKET ACCOUNTS IN ORDER TO PAY TODAY'S RETIREES, THUS ADDING MORE TO THE EVER INCREASING FEDERAL DEFICIT, A DEBT TO BE PAID BY THE FUTURE GENERATIONS OF AMERICANS; AND

WHEREAS, THE RISK AND UNPREDICTABILITY OF MARKET INVESTMENTS ARE TOO GREAT FOR MANY WORKING AMERICANS WHOSE ONLY SECURE "RETIREMENT PLAN" MAY BE SOCIAL SECURITY; AND

WHEREAS, SOCIAL SECURITY WAS NEVER MEANT TO BE DEFINED OR TREATED LIKE AN INVESTMENT FUND, BUT RATHER AS A SOCIAL INSURANCE PROGRAM, THE BENEFITS OF WHICH WERE NEVER EXPECTED TO HAVE A DIRECT RELATIONSHIP TO CONTRIBUTIONS; AND

WHEREAS, SOCIAL SECURITY IS NOT IN A CRISIS AND THERE ARE OTHER OPTIONS TO STRENGTHEN SOCIAL SECURITY AND PROTECT FUTURE BENEFICIARIES THAT MERIT CONSIDERATION, SUCH AS RAISING THE RETIREMENT AGE FOR FULL BENEFITS OR CHANGING THE BENEFIT CALCULATION TO BE BASED ON A WORKER'S 33 HIGHEST YEARS INSTEAD OF 35 YEARS; AND

WHEREAS, THE REAL CRISIS FOR SOCIAL SECURITY COULD BE RELYING ON INHERENTLY VOLATILE MARKET FORCES, THEREBY PLACING IN JEOPARDY THE LIVELIHOOD OF FUTURE RETIREES NOW, THEREFORE, BE IT

RESOLVED, BY THE SENIOR SENATE AND THE SENIOR ASSEMBLY, JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2005 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT THE PRESIDENT AND THE CONGRESS OF THE UNITED STATES ADOPT A POLICY STATEMENT DECLARING OPPOSITION TO THE PARTIAL OR TOTAL PRIVATIZATION OF THE FEDERAL SOCIAL SECURITY SYSTEM; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE CONGRESS AND THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER

RESOLVED, THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE PRESIDENT AND VICE PRESIDENT, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE CHAIRPERSONS OF THE HOUSE AND SENATE COMMITTEES ON AGING, AND TO EACH SENATOR AND REPRESENTATIVE FROM CALIFORNIA IN THE CONGRESS OF THE UNITED STATES.