Median black household income in 2001 was less than $30,000. The current Social Security tax, five times what it was when the program started sixty years ago, extracts the funds that these families could have saved if Alan Greenspan's retirement spending program was not financed on their backs. If these families could put their payroll tax in a fund that just invested in government bonds, they would get twice what Social Security promises them at retirement.
Meanwhile, black household wealth stagnates at less than 20% of the national average, and the "wealth gap" persists. According to the Federal Reserve, from 1998 to 2001 alone, there was a 70% increase in the wealth gap between the nation's 10% top wealthiest households and the poorest 20%.
President Bush should be commended for suggesting that we start thinking about real changes in Social Security. The only way out is the right and moral way out. Allow American workers to take the payroll taxes they are now forced to pay and invest them in a personal retirement account. Open the door to ownership, savings, and wealth creation to the many hard working Americans who today can no longer dream the American dream.
As Americans are given the option of redirecting their payroll taxes, the question will arise how to meet the obligations of the government spending commitments to existing retirees. Viable proposals have been released in recent days by Peter Ferrara of the Institute for Policy Innovation and by the Cato Institute, that would allow Americans to invest half their payroll tax, using the other half, the half paid by employers, together with federal spending cuts and funds from our capital markets to meet the outstanding interim obligations.
We can and must meet the current commitments of Social Security. However we must end the current scandal of politicians shirking their responsibilities by placing this burden on America's working poor and middle class. The challenge is not economic but moral. We have no choice but to meet this challenge.
Star Parker is president of CURE, Coalition for Urban Renewal and Education, and author of the newly released book "Uncle Sam's Plantation" (WND books, 2003). She can be reached at www.urbancure.org.