Social Security privitization plan would hurt Latinos

[Harold F. Schiffman]

The Greeley Tribune

Report: Social Security plan would hurt Latinos

Randy Bangert, (Bio) bangert at greeleytribune.com
June 29, 2005

BY LINDSAY RENICK MAYER

Medill News Service

WASHINGTON -- Latinos receiving Social Security benefits would be hurt by
President Bush's Social Security privatization plan, according to reports
released Tuesday by a think tank that focuses on how federal policy
affects low-income families. The studies by the Center on Budget and
Policy Priorities explained that Latinos get more in Social Security
benefits for each dollar they pay than nonLatinos, whites or blacks
because they are often among those who disproportionately benefit from the
program based on income, lifespan, disability rates and number of
children.

Bush's plan would reduce benefits for all workers but put a burden
especially on the 1.2 million elderly Latinos who receive Social Security
benefits, the reports found. For the majority of these beneficiaries, the
payments constitute more than half of their income. "Privatization has all
types of negative consequences for a program Latinos rely on for their
basic safety net," said Fernando Torres-Gil, director of the UCLA Center
for Policy Research on the Aging and co-author of the study.

In addition, it isn't well understood by many Latinos, said Carmen
Carrillo, executive director of Denver-based Mi Casa Resource Center for
Women, a nonprofit organization that seeks to help low-income Latinas and
youth. She said political jargon and little translation prevent many
Latinos from even understanding the implications of the president's Social
Security plan. "There has been a failure to communicate in simple language
how it will affect us," Carrillo said. "There is an audience, but the
audience getting to hear the president's message directly is selective to
people who agree."

The Center on Budget and Policy Priorities suggested a Social Security
plan that would include some benefit reductions and also new ways to
generate revenue, including retaining the estate tax and raising the
maximum wages subject to Social Security tax. Organizations such as the
conservative Heritage Foundation have released studies claiming that
Social Security's rate of return for most Latinos is actually inferior to
what they would accumulate through private investments.

Many Latinos, however, start small businesses or work in the service
industry where they are less likely or able to participate in
employer-sponsored retirement plans like 401(k)s, said Torres-Gil. This
increases their reliance on Social Security. In addition, Latino youth,
who are expected to make up 15 percent of the Latino population by the
year 2050, would bear an even greater burden of benefit reductions,
according to Tuesday's study. "Communities have to ask themselves what is
the future of young Latinos as they grow older and to what extent will
local communities have to step in and fill the gap," he said. "At this
point, Hispanic leadership of the political community does not have Social
Security or aging on its agenda."

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