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President Bush delivers a speech on Social Security reform at the Statehouse in Columbia, S.C. on

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That same day, protestors marched to where he was speaking. As Bush continues on his “Socia

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Financial experts tend to agree that if reforms are made early to Social Security, there will be a lesser degree of impact on current youth.

Social Security at the end of 2004 sustained 48 million beneficiaries and covered 159 million workers and their families, according to the recently released 2005 Annual Report of the Board of Trustees.

Though many UCLA students may not think Social Security is relevant to them, reforms will impact them in various ways depending on different forecasting factors, UCLA business professors say.

Currently, the future of Social Security is contingent upon certain things, including the size and characteristics of the beneficiary population, the level of monthly benefit amounts, the size of the work force and the level of workers’ earnings.

These are all dependent on demographic, economic and program factors, according to the Board of Trustees report.

Under the Social Security Act, which was instituted in 1935, the six-member board was established to oversee a variety of insurance funds.

One of its major functions includes annually reporting the financial and actuarial costs to Congress.

The Board of Trustees anticipates that beginning in the year 2017, the cost of supporting the benefits will exceed the amount of taxable income due to the baby boomers of the 1950s. Baby boomers are expected to retire when today’s youth are in their middle age, and this will result in a higher ratio of consumers to workers.

“We haven’t matched those birth rates,” said Michael Bazdarich, senior economist for the Anderson forecast.

If no Social Security reforms are enacted by 2041, the report suggests that beginning that year, there could be a payroll tax increase of up to 18.10 percent or a decrease in benefits of up to 32 percent by 2079.

Bazdarich adds that the standard age of retirement of 65 is also anticipated to increase to 75 or 80 in order to raise the Gross Domestic Product.

“The sooner adjustments are made, the smaller and less abrupt they will have to be,” according to the Board of Trustees report.

The current reform that is being debated is that of account privatization.

“Bush’s whole plan is kind of a Trojan horse to shift from defined benefits plan to defined contribution plan. All the rest is just political hot air,” Bazdarich said.

Currently, Social Security works under the defined benefits plan, in which workers receive a statement of the amount made and expected benefits once the worker retires.

The main purpose of Bush’s reform is to change the defined contribution plan in which a worker has the ability to invest their money in stocks, Bazdarich said. In this case, the government does not promise the worker anything but the profits of the worker’s investment in the form of benefits.

If the stock market isn’t as successful as the benefit plan, then the contribution plan won’t work, Bazdarich added.

“There is no way for the government to stay on the defined benefits plan the way demographics is going. (By privatizing) you are gaining something; it is one way to ensure (Social Security) is around,” Bazdarich said.

Reforming the system has been talked about for more than a decade according to Jim Courtney, agency spokesman for the Social Security agency.

“None of what they (Congressional debates on Social Security) are doing has any impact on this problem down the road. If only we could produce more goods and services 30 years from now. All this arguing really doesn’t do anything to increase production,” Bazdarich said.