Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Labor and Intergovernmental Affairs, to which was referred S.C.R. No. 76 entitled:

beg leave to report as follows:

The purpose of this measure is to urge Hawaii's congressional delegation to reject proposed changes to the social security system.

Testimony in support of this measure was submitted by the Hawaii State AFL-CIO, the Hawaii State Teachers Association, the AARP of Hawaii, and three individuals. Testimony in opposition to this measure was submitted by one individual.

Your Committees find that the social security system provides our retired and disabled workers, and their families, with essential benefits. A vast majority of those receiving social security benefits derive at least half of their income from social security. As such, social security plays a vital role in supporting the lives of the elderly and disabled in our country. Your Committees further find that concerns exist regarding the ability of the system to continue to pay benefits to future generations of retirees and disabled workers, and there are indications that the system will in fact be bankrupt by 2042. As a result, there has recently been much discussion regarding social security reform. Included within the options for social security reform is the proposal to privatize social security. However, your Committees believe that replacing the current system with personal investment accounts will not strengthen the system's finances, but will instead act to reduce guaranteed benefits, dramatically increase the national debt, and create intolerable investment risk for those who cannot afford such risk.

Although your Committees understand that some form of social security reform must be accomplished to ensure that future generations will be able to benefit from social security, they do not believe that privatization is a viable or advisable option for addressing the problems that are currently plaguing the system. Therefore, your Committees wish to encourage Hawaii's congressional delegation to oppose any actions to privatize social security.

As affirmed by the records of votes of the members of your Committees on Labor and Intergovernmental Affairs that are attached to this report, your Committees concur with the intent and purpose of S.C.R. No. 76 and recommend that it be referred to the Committee on Ways and Means.