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Tuesday, December 11, 2007

Social Security Reform: From My Public Speaking Class

This is the outline of a 7 minute speech I recently had to give for my Public Speaking class on reforming Social Security. While I understand this speech does not cover the entire topic and leaves out a lot of content, I still think that it is an interesting subject to discuss. The answers proposed in this speech may not actually be the right answers, but hopefully they will get you to think about the topic further. Please drop me a comment and feel free to discuss other ideas about Social Security.

Also, the outline may help those that are formulating speeches of their own. Hopefully my outline example helps guide you.


Reform Social Security Now


Attention-Getting Device: Imagine saving $1000 in the bank for a rainy day. Then when you went to withdraw the money, the bank could only give you $700 because they gave $300 of it away. That’s similar to a situation that Social Security could be facing over the next 34 years.

Importance Of Topic To Audience: As I discussed in my last speech, the Social Security Trust Fund will be exhausted by 2041. The system that we are paying into will be unable to pay you your full benefits. (1) That’s if nothing is changed.

Preview of the Speech/Orient the Audience:
Fortunately, there is a policy that could cure the system. Today, I would like to review the problems facing Social Security. Then I would like to follow by discussing a two-part solution that would ensure the solvency of Social Security into the foreseeable future:
1) The raising of the Tax Cap on Social Security
2) Linking the life expectancy of Americans to the age of retirement.

Transition: Now let me remind you why we need to reform Social Security.

Body:
I. The Social Security Trust Fund is in trouble.
a. Currently valued at nearly $2 Trillion dollars, this is known as the Social Security Lockbox. (1)
i. This is invested in US Bonds to pay for the baby boomers when they retire. In 2017, the Social Security lockbox will begin to cash those bonds and drain its savings all the way down to zero. (1)
ii. According to projections by the Social Security Board of Trustees and the US Congress, the Trust Fund will run out in 2041.
iii. Without any changes to the current system, Social Security will only be able to pay 70% of its promised retirement benefits. (1)
b. When President Roosevelt established the Social Security system in 1935, the life expectancy of an American was only 63. When the retirement age was set at 65, most people were not expected to live long enough to collect Social Security. (2)
i. Today, thanks to better health care and medical care, life expectancy has risen to 78. The health of Americans is projected to continue and life expectancy should rise to 83 years by 2041. These longer retirements were not planned for and have not been budgeted into the Social Security system. (3)

Transition: There is a way to fix the system. It has been, and can continue to be a social insurance that we can rely on in our old age with only a couple of changes. I am now going to tell you about raising the Social Security Tax Cap.

II. Raising the Tax Cap
a. Currently, all income earned is subject to Social Security Tax up to $97,000. Every dollar beyond that remains untaxed. This means that anybody that makes less than $97,000 a year is taxed on 100% of their income. Consider that the average American only makes $37,000 a year. Now for those that make over $97,000, they pay no Social Security tax on every dollar over $97,000. Millionaires like Bill Gates and Warren Buffet meet their Social Security obligation within the first 15 minutes of the new year. After that, none of their income is charged with a Social Security tax. (4)
b. In a plan currently touted by presidential candidate Barack Obama, Social Security could return to solvency by raising the Tax Cap to $115,000. While this would amount to a higher tax on the rich, and some will object, this added money could allow the system to absorb some of the shock created from longer life expectancies. I am asking the wealthy of this great country to pay a little bit more of their fair share. (5)

III. Linking life expectancy to the age of retirement.
a. As people have lived longer the length of their retirements has grown longer. This will be the primary reason for the exhaustion of the SS Trust Fund. While raising the tax cap will fix the problem, it will not keep the problem from happening again. A preventive measure that can be taken is linking life expectancy to the age of retirement. For every year life expectancy rises, the age of retirement should also rise. This would ensure that the system will never again be over-burdened due to the longer life spans of Americans. (6)
Transition: This brings me to my conclusion.

Conclusion: In summary I discussed:
1) Social Security is in danger of being unable to pay you your promised benefits.
2) By raising the Social Security Tax Cap on income, the system would be able to remain solvent despite the current size and life expectancy of baby boomers.
3) Linking Social Security retirement benefits to the average life expectancy will ensure that the system will never again be in danger of being unable to provide full benefits.

Motivation or Desired Action from the Audience: It is up to all of us to recognize that Social Security needs reformed now. You should contact your Congress-persons and Senators and demand that they address this issue now before its too late. I have included phone numbers to this area’s politicians in this handout (Pass out handout) so you can tell them to raise the cap on Social Security taxes. Do your own research, and let your voices be heard.

Closure Device: In the 2007 Democratic Debate at Drexel University, Barack Obama said “Social Security is not in crisis; it is a fundamentally sound system, but it does have a problem, long-term. We've got 78 million baby boomers, who are going to be retiring over the next couple of decades. That means more retirees, fewer workers to support those retirees. We are going to have to do something about it. The best idea is to lift the cap on the payroll tax, potentially exempting middle-class folks, but making sure that the wealthy are paying more of their fair share, a little bit more.”

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WORKS CITED

(1) “The 2007 Annual Report Of The Board Of Trustees Of The Federal Old-Age And Survivors Insurance And Federal Disability Insurance Trust Funds”. 110th Congress House Document 110-30, 67th Report (2007), US House Of Representatives The Board Of Trustees, Federal Old-Age And Survivors Insurance And Federal Disability Insurance Trust Funds As Referred To By The Committee On Ways And Means. 23 April 2007. Pages 2-4.
Accessed: 29 September 2007.

(2) White, Edwin, The Development of the Social Security Act. Madison, WI: The University of Wisconsin Press, 1962. Foreword, written by Perkins, Frances.

(3) Toner, Robin & Rosenbaum, David, “In Overhaul of Social Security, Age Is the Elephant in the Room”. New York Times, 12 June 2005.
Accessed: 09 October 2007.

(4) Cohen, Richard, “Social Security, Day By Day”. The Washington Post,
Page A21, 03 May 2005.
Accessed: 15 November 2007.

(5) “Obama To Push For Higher Social Security Tax”. Associated Press,
11 November 2007.
Accessed: 07 December 2007.

(6) Palley, Thomas, “Life Expectancy And Social Security: Why Longevity Indexing The Payroll Tax Rate Makes Good Economic Sense”.
Accessed: 09 December 2007.



I'm still learning about Social Security. If anybody would like to comment, it would be appreciated. Thanks for visiting.
------Sincerely, Trevor Stasik.



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