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NO. R-153. JOINT RESOLUTION REQUESTING CONGRESS TO PROTECT AND PRESERVE SOCIAL SECURITY.

(J.R.H. 113)

Offered by: Representatives Corren of Burlington, Aswad of Burlington, Bouricius of Burlington, Darrow of Newfane, Darrow of Dummerston, Hingtgen of Burlington, Jordan of Middlesex, Keenan of St. Albans City, Kreitzer of Rutland City, Nuovo of Middlebury, Smith of Sudbury, Sullivan of Burlington, Sweetser of Essex, Valsangiacomo of Barre City, Vinton of Colchester, Wheeler of Burlington and Zuckerman of Burlington.

Whereas, the purpose of Social Security is to provide a strong, simple and efficient form of basic insurance against the adversities of old age, disability and dependency, and

Whereas, for 60 years Social Security has provided a stable platform of retirement, disability and survivor annuity benefits to protect working Americans and their dependents, and

Whereas, the costs to administer Social Security are less than one percent of the benefits delivered, and

Whereas, the American and world economies continue to encounter periods of high uncertainty and volatility that make it as important as ever to preserve a basic and continuing safety net of protections guaranteed by our society's largest guarantor of risk, the federal government, and

Whereas, Social Security affords protections to rich and poor alike and no citizen, no matter how well-off today, can foretell tomorrow's adversities, and

Whereas, average life expectancies are increasing and people are commonly living into their 80's and 90's, making it more important than ever that each of us be fully protected by defined retirement benefits, and

Whereas, medical scientists are continually developing new ways to maintain and enhance the lives of people with severe disabilities, thus making it more important that each of us to be protected against the risk of dependency, institutionalization and impoverishment, and

Whereas, the lives of wage earners and their spouses are seldom coterminous; one often outlives the other by decades, making it crucial to preserve a secure base of protection for children and other family members dependent on a wage earner who may die or become disabled, and

Whereas, Social Security, in current form, reinforces family cohesiveness and enhances the value of work in our society, and

Whereas, Congress currently has proposals to shift a portion of Social Security contributions from insurance to personal investment accounts for each wage earner, and

Whereas, Social Security, our largest and most fundamental insurance system, cannot fulfill its protective function if it is splintered into individualized stock accounts and must create and manage millions of small risk-bearing investments out of a stream of contributions intended as insurance, and

Whereas, private accounts cannot be substituted for Social Security without eroding basic protections for working families, since such protections, to be strong, must be insulated from economic uncertainty and be backed by the entity best capable of spreading risk, the federal government, and

Whereas, the diversion of contributions to private investment accounts would dramatically increase financial shortfalls to the Social Security trust fund and require major reductions in the defined benefits upon which millions of Americans depend, and

Whereas, to administer 150 million separate investment accounts would require a larger bureaucracy, and the resulting expense and the cost of converting each account to an annuity upon retirement would consume much of the profit or exacerbate the loss realized by each participant, and

Whereas, the question of whether part of the Social Security Trust Fund should be diversified into investments other than government bonds so that, while still invested collectively at low expense, returns may be increased, thus enhancing the capacity of the fund to meet its obligations to pay benefits while spreading the risk across the entire spectrum of Social Security participants, is entirely different from that of splintering its millions of accounts, and

Whereas, creating an array of winners and losers would be contrary to the basic principles of insurance and risk distribution, thus defeating the purpose of this part of our retirement system, and

Whereas, Congress amended the Internal Revenue Code to provide a full menu of provisions that enables working Americans and their employers to voluntarily contribute to tax-sheltered accounts that are open to the opportunities and exposed to the risks of investment markets, diverting Social Security contributions to private accounts duplicates existing programs, and

Whereas, such recently created systems now cover half of American families, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly respectfully and strongly urges Congress not to enact laws that might tend to diminish or undermine a unified and stable Social Security system, and be it further

Resolved: That laws to encourage workers and their employers to save or invest for retirement should supplement and not substitute for the basic benefits of Social Security insurance that are vital to American working families, and be it further

Resolved: That the Secretary of State be directed to send a copy of this resolution to the President of the United States Senate, the Speaker of the House of Representatives of the United States and each member of the Vermont Congressional Delegation.