| 1 | 1 | | 81R3442 BPG-D |
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| 2 | 2 | | By: Raymond H.C.R. No. 74 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | CONCURRENT RESOLUTION |
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| 6 | 6 | | WHEREAS, The current financial crisis has drained some $2 |
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| 7 | 7 | | trillion in value from 401(k) accounts; millions of older Americans |
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| 8 | 8 | | now face diminished prospects for a comfortable retirement and are |
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| 9 | 9 | | more dependent than ever on the safety net provided by our social |
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| 10 | 10 | | security system; and |
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| 11 | 11 | | WHEREAS, Before passage of the Social Security Act of 1935, |
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| 12 | 12 | | economic hardship threatened many elderly Americans; now, only |
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| 13 | 13 | | about 11 percent of the elderly fall below the poverty line; 89 |
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| 14 | 14 | | percent of those 65 and older receive social security benefits, |
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| 15 | 15 | | which are the major source of income for two-thirds of all |
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| 16 | 16 | | beneficiaries; these benefits are the sole source of income for |
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| 17 | 17 | | more than a fifth of beneficiaries; and |
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| 18 | 18 | | WHEREAS, Although social security is the most successful |
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| 19 | 19 | | domestic program in the nation's history, the last presidential |
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| 20 | 20 | | administration sought to dismantle it through privatization; under |
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| 21 | 21 | | various Bush administration proposals, a portion of each worker's |
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| 22 | 22 | | social security contribution would have been diverted into a |
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| 23 | 23 | | personal investment account, and astonishingly, support for |
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| 24 | 24 | | privatization continues in some quarters, despite the market |
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| 25 | 25 | | meltdown; the Dow Jones Industrial Average plunged 39 percent |
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| 26 | 26 | | between October 9, 2007, and October 9, 2008, providing a vivid |
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| 27 | 27 | | illustration of the perils of personal accounts; and |
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| 28 | 28 | | WHEREAS, Privatization has proven disastrous in a number of |
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| 29 | 29 | | other countries; it brought enormous administrative costs in Great |
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| 30 | 30 | | Britain, which devoured some 40 percent of the return on |
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| 31 | 31 | | investment; unscrupulous brokers preyed on unsophisticated |
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| 32 | 32 | | investors, and the basic pension shrank dramatically, throwing many |
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| 33 | 33 | | retired citizens into poverty; in Chile, transition costs, |
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| 34 | 34 | | commissions, and other administrative expenses siphoned so much |
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| 35 | 35 | | value from investment accounts that more than 40 percent of those |
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| 36 | 36 | | eligible to collect were forced to continue working; and |
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| 37 | 37 | | WHEREAS, Administrative costs for flexible private accounts |
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| 38 | 38 | | in the United States would be much higher than the very low |
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| 39 | 39 | | operating costs of social security today; moreover, the government |
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| 40 | 40 | | would need a new bureaucracy to track the myriad small investment |
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| 41 | 41 | | accounts belonging to individual taxpayers; the estimated cost of |
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| 42 | 42 | | establishing the new accounts is somewhere between $2 and $3 |
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| 43 | 43 | | trillion over coming decades, which would weaken social security's |
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| 44 | 44 | | long-term finances and require some combination of federal |
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| 45 | 45 | | borrowing, tax increases, and benefit cuts; and |
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| 46 | 46 | | WHEREAS, Privatization is a hugely complicated and costly |
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| 47 | 47 | | process, fraught with potential disaster for even the most savvy |
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| 48 | 48 | | investors; since most employers today offer defined contribution |
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| 49 | 49 | | plans, such as 401(k)s, rather than defined benefit plans, retiring |
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| 50 | 50 | | workers are already dangerously exposed to market risks; stocks, |
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| 51 | 51 | | commodities, and real estate have become more volatile over the |
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| 52 | 52 | | past decade, and most Americans can ill afford to exchange social |
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| 53 | 53 | | security's guaranteed minimum retirement income, indexed to the |
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| 54 | 54 | | rate of inflation, for a chance to roll the dice in the financial |
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| 55 | 55 | | markets; now, therefore, be it |
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| 56 | 56 | | RESOLVED, That the 81st Legislature of the State of Texas |
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| 57 | 57 | | hereby respectfully urge the United States Congress not to |
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| 58 | 58 | | privatize the social security program; and, be it further |
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| 59 | 59 | | RESOLVED, That the Texas secretary of state forward official |
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| 60 | 60 | | copies of this resolution to the president of the United States, the |
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| 61 | 61 | | speaker of the house of representatives and the president of the |
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| 62 | 62 | | senate of the United States Congress, and all the members of the |
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| 63 | 63 | | Texas delegation to the congress with the request that this |
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| 64 | 64 | | resolution be officially entered in the Congressional Record as a |
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| 65 | 65 | | memorial to the Congress of the United States of America. |
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