As the nation ponders proposals to overhaul the Social ecurity system, African Americans are asking what privatization would mean for the Black community. There are differences of opinion among Blacks about whether individuals should use a portion of their individual Social security accounts to invest in the stock market.
Referring to Social security's long-term financing problems, Richard Parsons, chairman and CEO of Time Warner, said "We're on a train wreck course. You can't fix this problem with no pain, without making some sacrifices, but the time to start making those sacrifices is now."
Parsons was co-chair of the President's Commission to Strengthen Social security. Bush's 16-member board examined models to create private retirement accounts. According to Parsons and other African American members on the 2001 commission, including former Social security Commissioner Gwendolyn King and Black Entertainment Television (BET) Founder Robert Johnson, individual accounts are vital to fixing Social security's problems.
Nevertheless, many African Americans disagree with that view.
Rep. Elijah E. Cummings (D-Md.), for example, is against creating individual accounts by carving up Social security.
"These accounts do nothing to close Social security's financing shortfall in 2052 and will require taxpayers to take on more than $2 trillion in debt in order to pay for them," says Cummings.
King disagrees. Speaking at a 2002 Cato Institute gathering, she said Social security would be strengthened by allowing workers to use a small portion of their 6.2 percent Social security contribution to create a personal retirement account that would enable them to gain a larger return on their money than is currently earned.
But it is the very idea of disrupting the guaranteed benefit provided by Social security that has raised concern about the prospect of individual accounts among working and middle-class Americans. A recent poll conducted by AARP, Rock the Vote and the Joint Center for Political and Economic Studies shows that though the possibility of wealth generated by private retirement accounts resonates with many African Americans, the majority of Blacks would be opposed to private accounts if they threaten Social security.
Studies show that African Americans are less likely than Whites to have private wealth or pensions to draw upon after retirement. …