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CONCURRENT RESOLUTION
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WHEREAS, The current financial crisis has drained some $2 |
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trillion in value from 401(k) accounts; millions of older Americans |
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now face diminished prospects for a comfortable retirement and are |
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more dependent than ever on the safety net provided by our social |
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security system; and |
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WHEREAS, Before passage of the Social Security Act of 1935, |
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economic hardship threatened many elderly Americans; now, only |
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about 11 percent of the elderly fall below the poverty line; 89 |
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percent of those 65 and older receive social security benefits, |
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which are the major source of income for two-thirds of all |
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beneficiaries; these benefits are the sole source of income for |
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more than a fifth of beneficiaries; and |
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WHEREAS, Although social security is the most successful |
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domestic program in the nation's history, the last presidential |
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administration sought to dismantle it through privatization; under |
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various Bush administration proposals, a portion of each worker's |
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social security contribution would have been diverted into a |
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personal investment account, and astonishingly, support for |
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privatization continues in some quarters, despite the market |
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meltdown; the Dow Jones Industrial Average plunged 39 percent |
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between October 9, 2007, and October 9, 2008, providing a vivid |
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illustration of the perils of personal accounts; and |
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WHEREAS, Privatization has proven disastrous in a number of |
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other countries; it brought enormous administrative costs in Great |
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Britain, which devoured some 40 percent of the return on |
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investment; unscrupulous brokers preyed on unsophisticated |
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investors, and the basic pension shrank dramatically, throwing many |
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retired citizens into poverty; in Chile, transition costs, |
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commissions, and other administrative expenses siphoned so much |
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value from investment accounts that more than 40 percent of those |
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eligible to collect were forced to continue working; and |
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WHEREAS, Administrative costs for flexible private accounts |
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in the United States would be much higher than the very low |
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operating costs of social security today; moreover, the government |
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would need a new bureaucracy to track the myriad small investment |
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accounts belonging to individual taxpayers; the estimated cost of |
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establishing the new accounts is somewhere between $2 and $3 |
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trillion over coming decades, which would weaken social security's |
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long-term finances and require some combination of federal |
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borrowing, tax increases, and benefit cuts; and |
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WHEREAS, Privatization is a hugely complicated and costly |
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process, fraught with potential disaster for even the most savvy |
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investors; since most employers today offer defined contribution |
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plans, such as 401(k)s, rather than defined benefit plans, retiring |
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workers are already dangerously exposed to market risks; stocks, |
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commodities, and real estate have become more volatile over the |
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past decade, and most Americans can ill afford to exchange social |
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security's guaranteed minimum retirement income, indexed to the |
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rate of inflation, for a chance to roll the dice in the financial |
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markets; now, therefore, be it |
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RESOLVED, That the 81st Legislature of the State of Texas |
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hereby respectfully urge the United States Congress not to |
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privatize the social security program; and, be it further |
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RESOLVED, That the Texas secretary of state forward official |
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copies of this resolution to the president of the United States, the |
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speaker of the house of representatives and the president of the |
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senate of the United States Congress, and all the members of the |
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Texas delegation to the congress with the request that this |
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resolution be officially entered in the Congressional Record as a |
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memorial to the Congress of the United States of America. |