Featured Ministry Living Water   The World Health Organization anticipates contaminated water to be one of the greatest threats to long­­-term health and recovery in Haiti. Living Water International, with the motto "providing a cup of water in Jesus' name," is working to restore water systems damaged by the earthquake, as well as continuing initiatives to expand access to clean water in Haiti and around the globe. One immediate goal is to repair 500 incapacitated handpumps in Haiti during 2010, serving at least 250,000 people. More Current Articles in Public Policy: • Dear Congressional Representatives: Repeal the Death Penalty by Heidi Unruh • Healthcare Reform at a Crossroads, Families Still Hurting by Heidi Unruh • Response to Objections on the Healthcare Call-In by Ron Sider • Haiti’s Story, Our Story  by Heidi Unruh

Last week presumptive Republican presidential nominee Senator John McCain was pilloried by the left for calling the way Social Security is funded a disgrace. These are his actual words: We are paying present-day retirees with the taxes paid by young workers in America today. And thats a disgrace. Its an absolute disgrace, and its got to be fixed. Many on the left believe that he, along with conservative Republican politicos such as President Bush, have been for a long time angling to dismantle Social Security. Although many conservative Republicans would like to see retirement financing privatized and marketized, Im not convinced (yet) that McCain wants to put in place policies that would make the 73-year-old Social Security program wither away. (He said as much in the same speech.) He wouldnt be able to privatize Social Security in the near future even if he wanted to because most Americans oppose it.

President Bush found this out the hard way in 2005 when he received a paralyzing political jolt from the third rail as he made a Herculean effort to partially privatize Social Security. His was an unsuccessful attempt to reform Social Security to address funding shortfalls.

Social Security was established in 1935 to provide benefits to workers and their families in retirement or in case of disability or death. About 3 out of 5 Social Security recipients are retirees. Everyone else is either a widow, widower, or a child of a deceased worker. The intent was to reduce and prevent poverty by making people who worked at least 10 years and contributed to the Social Security Trust Fund eligible for federal assistance when regular employment wasn't possible. The program has significantly reduced poverty, especially among the elderly.

But when Social Security was established there were 16 workers providing payroll tax revenue for each retiree. Now there are only 3.3 tax-paying workers for each retiree. That is clearly a problem. But annual reports of the respected Board of Trustees of Social Security project that the trust fund will be empty no sooner than 2041.

John McCain hasn't yet made a full-bodied Social Security proposal during the presidential campaign. However, it seems that 1) he welcomes a bipartisan compromise to ensure a politically feasible reform, and 2) he would prefer giving younger workers the option of diverting some of their FICA tax to individual retirement accounts. This will give payroll taxpayers more freedom to choose how they want to fund their payroll tax-based retirement. However, it will also reduce the Social Security funding the 3.3 workers would normally provide for the one retiree. This will make it even more difficult to avoid Social Security bankruptcy (which is why many on the left believe McCain wants to kill Social Security).

Senator Barack Obama, on the other hand, opposes any privatization of Social Security. He believes, in contradiction to Senator Hillary Clinton, that Social Security is in crisis. His primary fix is to increase the payroll tax cap from $102,000. All workers contribute 6.2% and employers contribute 6.2% of payroll to Social Security, except those whose annual payroll exceeds $102,000. They pay nothing on their payroll over that cap, which means the highest income workers are taxed proportionately less than their lower income worker counterparts. Obama wants to tax more of the income of upper-middle-income and high-income workers, but presumably still at the 6.2% FICA tax rate every other worker pays. He also wants to establish automatic workplace pension plans for those workers working for employers who do not provide a pension plan, which is about half the workforce. "Under this plan, employers automatically enroll their employees in a direct deposit IRA account. Employees may opt-out by signing a written waiver. Even after enrollment, employees will retain the right to change their savings levels, reallocate investment portfolios or end contributions to the account." Employers will not finance the plan, would merely be a forwarding agent for employee contributions, and they would be eligible for tax credits to defray any cost to the employer. Of course, these contributions would be in addition to the standard FICA tax, not part of it.

This debate is not new. The fundamental question the country needs to answer is whether the thus-far effective federally funded anti-poverty program for retirees, widows, widowers, and children of deceased workers should continue to be government-based or privatized. Despite the dire rhetoric and because Social Security has been so effective, we have a while to work out a politically feasible reform that avoids the vagaries of the stock market while remaining solvent for the long haul.