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Recent polls indicate that young people are embracing President Bush's proposal for private investment accounts as a means to fix Social Security.
In a February poll, the Pew Research Center for the People and the Press reported that 66 percent of Americans between ages 18 and 29 support privatizing a portion of Social Security taxes, up from 64 percent in December.
As Social Security continues to be a focus on Capitol Hill, USC students are developing their own opinions on the issue.
"It seems like politicians are stalling on the issue because some age groups are worried that their benefits will be cut. And it doesn't make sense because the creation of private accounts doesn't affect older people who receive or will soon be receiving Social Security benefits" said James Danko, a third-year civil engineering student.
Danko said his frustration stems from a fear that he won't be repaid 40 years from now. The Social Security Administration estimates that the federal government can afford to pay full benefits until 2018, at which point tax revenues will not be enough to support those receiving aid. And the situation will only get worse afterward, experts say.
"In a few decades, under current law, there will be 74 cents in taxes coming into the Trust Fund from which $1 in projected benefits must be paid out. Hence, there is a potential serious problem with the system that should be addressed now - not two decades from now," said B.F. Kiker, a chairman of the economics department in USC's Moore School of Business.
Bush's solution is to invest a portion of each citizen's payroll taxes - which are withheld from paychecks to fund Social Security - in a combination of conservative bond and stock funds, which would accumulate over time in a sort of personal bank account.
"Since the (accounts) are individually owned, they provide an opportunity for a large segment of the population to accumulate assets that would otherwise not be available," Kiker said.
Lawmakers say it's a good idea - one that Democrats and Republicans have researched in previous years, including S.C. Sen. Lindsey Graham, who called private accounts "a vital part of the solution mix for Social Security reform" in a March news release.
The Republican National Committee says the accounts will provide younger workers with an opportunity to receive greater benefits than the current system can afford to pay and create a fund for retirement that the government cannot take away.
"The individual retirement accounts are voluntary. I would expect most young workers to opt for them. If a worker dies, the account balance goes to his beneficiaries," Kiker said. "Under the current system the contributions may be lost."
Citizens who do not wish to participate would continue to draw from traditional benefits, which still need to be reformed in order to have Social Security at all in the future.
Kiker said the current system could also be reformed by increasing the retirement age accordingly during the next 20 years - because people live longer now than when the program was begun by President Franklin Delano Roosevelt in 1937 - while also maintaining an early retirement option.
As the system stands today, the RNC reports that future Congresses could be forced to increase payroll taxes 50 percent during the next 75 years to keep distributing full benefits. Otherwise, those benefits will have to be cut significantly.
The SSA estimates two-thirds of today's retirees rely on Social Security for more than half their income and approximately 50 percent of recipients would be in poverty without it.
Advocates of private accounts also believe they will offer each individual more control over their money, and, to Danko, the prospect of seeing more of his own tax dollars come back to him is a welcome substitute to footing a potentially large welfare bill for several retirees right now and seeing nothing in return down the line. Social Security payroll taxes also provide support to citizens who are survivors of families in which the primary wage-earner dies or to those who have disabilities.
"Not only will the accounts promote individual responsibility and economic literacy among Americans, they allow a person the satisfaction of seeing their money work for them," Danko said.
Kiker had a similar opinion saying it seems clear to him that younger Americans "would be better off financially by participating in the individual accounts than they would under the current system."
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