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F I S C A L I M P A C T R E P O R T

SPONSOR Lujan

DATE TYPED 2-21-2005 HB HJM 71

SHORT TITLE Oppose Social Security Privatization

SB

ANALYST Taylor

SOURCES OF INFORMATION

LFC Files

SUMMARY

House Joint Memorial 71 urges the New Mexico Congressional Delegation to oppose any pro-

posals by the U.S. Presidency to dismantle social security by privatizing the program. The me-

morial asserts:

•

President Bush is making the overhaul of the social security system a priority;

•

that when social security was enacted almost half of America’s senior citizens lived in

poverty, and today that number is just over 10 percent;

•

the percentage of Hispanic seniors living in poverty is 44 percent, twice that of non-

Hispanic seniors, and Hispanic seniors, particularly Hispanic women seniors, are less

likely to receive income from pensions, interest, dividends, savings or other sources, and

that more than one-half of Hispanic women depend on social security as their sole source

of income;

•

two hundred eighty thousand men, women and children in New Mexico depend on social

security benefits, and that without social security one hundred nine thousand New Mex-

ico seniors would be living in poverty;

•

approximately one in six New Mexicans, or two hundred ninety-five thousand people, re-

ceive social security benefits, either as a retiree, a disable worker, a widow or a child;

•

almost one-third of social security beneficiaries in New Mexico are under the age of

sixty-five, more than thirty thousand are widows and twenty-eight thousand are children;

•

the administration’s proposal includes no identified plan for addressing the needs of wid-

ows and children;

•

many economists question whether the social security system is in actual trouble, since

there are sufficient funds to cover social security commitments until the middle of the

century and that minor, non-privatization adjustments could protect the program beyond

that time;

•

social security is the nation’s most successful and important family protection program;

•

the basic idea behind the administration’s plan to reform social security is to let Ameri-

cans divert part of their payroll taxes to personal investment accounts, but the administra-

House Joint Memorial 71 -- Page 2

tion has not specified how to pay for the reform plan, how much retirement benefits

would be reduced or explained the logic of borrowing trillions of dollars to offset tax

revenues diverted into private accounts;

•

there is nothing preventing young Americans from to provide additional retirement in-

come, and various employer sponsored plans encourage them to do so;

•

there are more pressing issues facing the county that need to be addressed by the congress

and the administration;

•

the budget deficit is a greater and more immediate threat to federal government finances

than is social security.

The memorial concludes that it be resolved by the Legislature of the State of New Mexico that

the members of the New Mexico congressional delegation be urged to recognize the unique fea-

tures of the social security program; be urged to oppose privatizing the social security program

and instead make minor adjustments to the program; and that copies of the memorial be transmit-

ted to the New Mexico congressional delegation, the president of the United States and the chief

clerks of the U.S. house of representatives and the United States senate.

BT/rs