In his radio address, the American president clearly articulated the choice. "If we do not act now," he said, "the government will have only two options: either cut pension payments drastically or significantly increase taxes." Both measures with which Bush frightens his compatriots are capable of producing an effect similar to the elimination of benefits in our country. At the same time, the president is confident that the current generation of workers and those already retired can still count on the existing system.
"However," he warns, "if we do not put it in proper order, our children and grandchildren will be left without pensions." That is why Bush urged young people who are just starting to work to contribute part of their earnings not to state but to private management companies (the latter appeared in the U.S. even earlier than state ones). This, in fact, is the main point of his reform project.
The U.S. pension system has always been considered one of the most reliable in the world. However, in recent decades a general trend has emerged in developed countries – a noticeable increase in the standard of living and, along with it, life expectancy. As a result, the number of non-working people has almost equaled the number of workers. Russia, with its life expectancy indicators, has not been affected by this problem, as one might guess. But Europe, like the U.S., faces a dilemma: what to do with a pension system that will soon be unable to provide the elderly with a decent pension? In France and Austria, where pension reform began in 2003, protests spilled into the streets. German Chancellor Gerhard Schroeder also faced a similar reaction.
In the U.S., the need for reform was discussed during the 2000 presidential campaign. Bush, as we recall, did not want to frighten his fellow citizens then: he built his campaign on the promise to cut taxes by $1.6 trillion. Having put off the pension problem until his second term, Bush, just re-elected, clutched his head: the social security system would soon exhaust itself.
The president's fears are not unfounded. By 2018, the Social Security Administration will have to pay out more than it receives from taxes (the pension tax in the U.S. is 15.3% of salary, half of which is paid by the employee and half by the employer). And by 2042, the state pension fund will have completely exhausted its reserves. Nevertheless, Democrats disagree with Bush's initiative. According to Senator Debbie Stabenow, the cost of the reform – from $1 to $2 trillion – will only increase the budget deficit, which has already reached unprecedented levels. "This could strangle economic growth," the senator warned.
Apparently, the Bush administration is prepared for such a risk. However, many critics, including some of the president's supporters, warn that this does not protect against unpopular measures – increasing taxes, raising the pension tax rate, lowering pension levels. Will we soon see American pensioners, following in the footsteps of Russian ones, defending their right to a decent old age?