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Public Opinion on Privatizing Social Security Still Fluid

Public Opinion on Privatizing Social Security Still Fluid

Most see Social Security as important issue for Congress to tackle

GALLUP NEWS SERVICE

PRINCETON, NJ -- Reforming Social Security is fast becoming one of the key focus points of both the Bush administration and the Republican Congress. In fact, Senate GOP leaders on Monday said the "Social Security Solvency and Protection Act" would be their top priority for the coming session.

Here are some major questions often asked about public opinion and Social Security, with corresponding answers:

1. Do Americans agree that Social Security is in a "crisis" that must be addressed at once?

No. In the minds of most Americans, it is not in a state of crisis, but clearly has major problems that need to be addressed in the near term.

Here's a basic Gallup question that gives respondents four choices in reference to the Social Security system:

Which of these statements do you think best describes the Social Security system -- it is in a state of crisis, it has major problems, it has minor problems, or it does not have any problems?

 

Crisis

Major
problems

Minor
problems

Does not
have any
problems

No
opinion

 

 

 

 

 

2005 Jan 7-9

18%

53

24

3

2

From one perspective, more than 7 out of 10 Americans think Social Security has at least major problems. But from another perspective, only a distinct minority are willing to use the "c word" (crisis) to describe the Social Security system as it stands today.

The degree of urgency Americans feel about fixing Social Security is clarified in a separate question that asks when the federal government should make major changes to the system. The results show a divided public: about half of Americans believe that the government should act quickly to do something about Social Security, while the other half would be satisfied with longer-term (or even no) changes.

Do you think the federal government should make major changes in the Social Security system to ensure its long-term future -- in the next year or two, within the next 10 years, or do you think major changes are not needed within the next 10 years?

 

In the next
year or two

Within the
next 10
years

Changes
not needed
within next
10 years

No
opinion

 

 

 

 

2005 Jan 7-9

49%

39

9

3

A December Gallup Poll gave Americans a list of issues and asked for their assessments of the priorities that should be assigned to each in the next year. The results showed that Social Security was tied for fifth on the list, with 40% of Americans saying it was an extremely important issue for Congress and the president to deal with, and a total of 82% saying it was either extremely or very important. Iraq, terrorism, and education were among the issues to which the public gave higher priorities.

Social Security is not a top-of-mind priority when Americans are asked to name the most important problem facing the country today. Only 5% spontaneously mention either Social Security or Medicare in response to this question, putting it far down the list that is dominated by economic issues and Iraq, healthcare quality and costs, and terrorism.

2. Just how much are Americans depending on Social Security income when they retire?

Americans who are not yet retired seemingly hold out few hopes that Social Security will be a substantial source of their retirement income, perhaps due to all of the media attention being given to the system's flaws:

When you retire, how much do you expect to rely on Social Security -- [ROTATED: as your main source of income, as a minor source of income, or not at all]?

BASED ON 743 NON-RETIRED ADULTS

 

Main source
of income

Minor source
of income

Not at all

No
opinion

%

%

%

%

2005 Jan 7-9

18

57

24

1

 

 

 

 

2000 Aug 11-12

17

55

26

2

1998 Jul 13-14

17

58

23

2

Note that there have been very few changes in these views over the last seven years. Less than a fifth of non-retired Americans say they will depend on Social Security as the main source of their income, while the rest say it will be either a minor source or not a source of income at all.

Contrast this with the reality of the situation for those who are currently retired:

How much do you currently rely on Social Security -- [ROTATED: as your main source of income, as a minor source of income, or not at all]?

BASED ON 265 RETIRED ADULTS

 

Main source
of income

Minor source
of income

Not at all

No
opinion

 

 

 

 

2005 Jan 7-9

44%

40

14

2

Forty-four percent of retired Americans say they depend on Social Security as their main source of income, and another 40% say it is a minor income source.

The lack of faith in Social Security as a major future income source (among non-retired workers) is partly reflected by the fact that half of non-retired Americans believe the Social Security system will not be able to pay them a benefit when they retire. Forty-five percent say it will.

Do you think the Social Security system will be able to pay you a benefit when you retire?

BASED ON 743 NON-RETIRED ADULTS

 

Yes

No

DOESN'T
APPLY
(vol.)

No
opinion

%

%

%

%

2005 Jan 7-9

45

50

1

4

 

 

 

 

2001 Mar 26-28

52

41

2

5

2000 Aug 11-12

49

42

2

7

1994 Jan

47

52

--

1

1992 Mar

49

49

--

2

1991 Mar

49

48

--

3

1991 Mar

51

42

--

7

1990 Mar

48

47

--

5

1989 Dec

49

47

--

4

There have been some fluctuations in responses to this question over the last 15 years. In the Jan. 7-9 poll, Americans aged 18 to 49 are much less likely to believe Social Security will be able to pay them a benefit when they retire than are those who are older.

3. Do Americans support the concept of privatizing a portion of Social Security?

There is no clear-cut answer to that question. Support for privatizing Social Security varies widely, depending on how the proposed plan is explained to survey respondents.

This is largely because there is not yet a specific, widely understood plan for privatizing Social Security. Americans vaguely comprehend the idea that in privatization, some portion of their potential benefits would be put in private investment accounts, but apparently, they do not understand much more than that. Hence, the devil is in the details. And it is those details (as spelled out in the wording of the various poll questions) that seem to dictate whether respondents respond positively or negatively to a particular description of privatization.

So we find support levels for Social Security privatization that soar as high as 60% in one poll and dip as low as 29% in another. Respondents are most likely to approve of the concept when the question stresses positive things like "choice" and that only 5% of one's Social Security taxes would be involved. They are much more negative when the question stresses that the money would go into the stock market, that such a plan could reduce guaranteed benefits, or that there would be a need to borrow trillions of dollars in the short term (even if the money would be paid back in the future).

The bottom line: Public opinion about the privatization concept is still pretty much up for grabs -- depending on how the idea is defined.

Here's the way Gallup asked about privatizing Social Security in its early January poll:

As you may know, one idea to address concerns with the Social Security system would allow people who retire in future decades to invest some of their Social Security taxes in the stock market and bonds, but would reduce the guaranteed benefits they get when they retire. Do you think this is a good idea or a bad idea?

 

Good idea

Bad idea

No
opinion

 

 

 

2005 Jan 7-9

40%

55

5

A similar question asked by an NBC News/Wall Street Journal poll also found 40% support for the concept:

In general, do you think that it is a good idea or a bad idea to change the Social Security system to allow workers to invest their Social Security contributions in the stock market?

Good idea

Bad idea

Unsure

 

 

 

2005 Jan 13-17

40%

50

10

Source: NBC News/WSJ poll

Both of these questions specifically mention the stock market, which may scare some respondents into being less supportive of privatization.

A Pew Research Center poll found lower support levels in response to a question about privatization that heavily emphasized the idea of a guarantee under the current system:

People have different opinions about how the Social Security system might be changed for the future. When decisions about Social Security's future are being made, which do you think is MORE important: keeping Social Security as a program with a GUARANTEED monthly benefit based on a person's earnings during their working life, OR, letting younger workers DECIDE for THEMSELVES how some of their own contributions to Social Security are invested, which would cause their future benefits to be higher or lower depending on how well their investments perform?

 

Guaranteed
benefit

Younger workers
decide, making
benefit variable

2005 Jan 5-9

65%

29

Source: Pew Research Center poll

But another question wording used in recent months has found significantly higher support levels for the concept of Social Security privatization.

The question, from a December Fox News/Opinion Dynamics poll, asks:

Do you think people should have the choice to invest privately up to 5% of their Social Security contributions, or not?

 

Should
have choice

Should not
have choice

2004 Dec 14-15

60%

27

Source: Fox News/Opinion Dynamics poll

4. Social Security is clearly an issue of direct relevance to older Americans, and less so in the short term to younger Americans. How do views about Social Security vary by age?

Support for privatizing Social Security varies substantially with age. The older the American, the less he or she supports the idea. In one recent Gallup Poll (using the previously mentioned question wording involving "the stock market and bonds"), support for privatization was 55% among 18- to 29-year-olds, but only 29% among those 65 and older.

Interestingly, it's not the oldest Americans (aged 65+) who ascribe the greatest urgency to doing something about Social Security, but rather those 50-64.

This is presumably because the 50- to 64-year-olds are those for whom retirement is looming large, and who see the possibility of not having Social Security as a real threat. Those 65 and older may realize that their Social Security benefits will probably be protected, regardless of what changes are made (although, as noted, this group is least likely to support the idea of allowing workers to privatize part of their Social Security investments).

5. Are Americans optimistic that something substantive will be done about Social Security in the short term?

No, they are not. Only 40% of Americans say the Bush administration will be able to "ensure the long-term strength of the Social Security system" over the next four years. That's down from the 50% who felt that way in January 2001.

Whether or not you support Bush, do you think the Bush administration will or will not be able to do each of the following in its second term in office? How about -- [random order]?

Ensure the long-term strength of the Social Security system

 

Yes, will

No, will not

No opinion

 

 

 

2005 Jan 14-16 ^

40%

57

3

2001 Jan 15-16

50%

44

6

^ Asked of a half sample

And despite Bush's discussion of and emphasis on his ideas about privatizing Social Security, just 48% of Americans believe he has a clear plan for handling Social Security, while 49% do not believe this.

It comes as little surprise, then, that when Americans are asked whether Bush did or did not accomplish a long list of objectives in his first term, Social Security is at the absolute bottom of the list. Only 18% think he ensured the long-term strength of the Social Security system.

Next I have some questions about the Bush administration. Whether or not you support Bush, in your view, do you think the Bush administration did or did not do each of the following in its first term in office? How about -- ?

SUMMARY TABLE: DID THE BUSH ADMINISTRATION DO THE FOLLOWING?

2005 Jan 14-16
(sorted by "yes, did")

Yes, did

No, did not

%

%

Improved military security for the country

62

36

Improved moral values in the United States

50

49

Cut your taxes

46

48

Kept America prosperous

46

50

Increased respect for the presidency

45

52

Improved education

42

52

Improved respect for the United States abroad

32

65

Improved the quality of the environment

31

63

Ensured the long-term strength of the Medicare system

28

63

Healed political divisions in this country

27

68

Improved the healthcare system

26

69

Ensured the long-term strength of the Social Security system

18

74

Survey Methods

These results are based on telephone interviews with randomly selected national samples of approximately 1,000 adults each, aged 18 and older, conducted between February 2001 and January 2005. For results based on these samples, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.


Gallup https://news.gallup.com/poll/14737/Public-Opinion-Privatizing-Social-Security-Still-Fluid.aspx
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