Center on Budget and Policy Priorities, An Analysis of Sen. Graham's Social Security Plan, by J.Furman and Robert Greenstein
In the last Congress, the 108th, Sen. Lindsey Graham (R-SC) introduced a plan to reform Social Security. Although it went nowhere, it is significant because the plan was drafted with Whitehouse input and forms the basis for Pres. Bush’s current plan. Using the Congressional Budget Office (CBO) projections, Furman and Greenstein chart how our benefits would be impacted by the privatization scheme. The chart above makes it pretty clear that privatization cuts benefits.
For example, if you were born in 1970 the current Social Security benefit promised to you would be $17,700 for the first year of retirement. Social Security is also able to cover that entire amount. Under the Graham plan, your total first retirement year benefit (the reduced guaranteed SS benefit + annuity payment from your private account) would be $12,841. This is 27% less than you would have received if you stayed in the traditional SS system.
It gets worse the younger you are. For example, an eight year old child would receive $13,092 in the first year of retirement under the Graham plan. This is 50% less than the current law scheduled benefits ($26,400) and 34% less than current law benefits payable ($19,900). In other words, even if we do nothing – change nothing – the youngest among us will be guaranteed more with the traditional plan than with the privatization plan.