"Somehow liberals have been unable to acquire from birth what conservatives seem to be endowed with at birth: namely, a healthy skepticism of the powers of government to do good." - Democratic Senator, Daniel Patrick Moynihan
"The Social Security program plays an important part in providing for families, children, and older persons in times of stress. But it cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision." - President John F. Kennedy, 1961
Where I Stand Series: Part 7 - Seniors & Retirement Security
"Principled Solutions for Empowered Citizens"
ON RETIREMENT SECURITY, I BELIEVE IN THE FOLLOWING CORE PRINCIPLES -
When it comes to retirement security, our parents and grandparents deserve better.
According to the Heritage Foundation, the unfunded promises of the federal government are equal to a mortgage on future generations of $57 trillion, or $184,000 for every man, woman, and child in the U.S. That makes entitlement reform so crucial to long term fiscal health.
As President Clinton said, in order to save Social Security for the future, we have three options, "raise taxes, cut benefits, or privately invest."
I agree with both Heritage and President Clinton that those 55 and over today, will remain in the Social Security system without a single benefit cut or program change. Period! No ifs, ands, buts or scare tactics.
For those under 55, Social Security presents a problem. Either take a 23% reduction in benefits, raise your retirement age, increase taxes, or increase the rate of return. I believe that we must increase the rate of return for those under 55 by offering citizens the same voluntary option federal workers receive that allow them to invest in a few funds that are safe and historically have returned far greater benefits than the 1.5% of Social Security.
Some say this plan is risky in light of recession, Enron, and war. However, as pointed out by the Cato Institute, over the last 80 years, private investment in the United States has earned an average annual return of nearly 8 percent. That period included not only the market decline of the last few years but the Great Depression, World War II, several smaller wars, numerous recessions, the "stagflation" of the 1970s, and the bursting of the dot.com bubble as well.
Spending on the three major entitlements (Medicare, Medicaid, and Social Security) will more than double in the next 40 years. Without major reforms entitlement spending will consume all federal tax revenues by 2052.
We have spent decades doing nothing and passing the buck to our kids. As we continue to pile up debt, tough choices have to be made. I stand ready to work with colleagues to fix the problem. I have never backed down from a difficult political decision and I won't back down now. The greatest generation deserves no less than to know they have left a system in solid financial shape for their kids and grandkids.
WITH THOSE PRINCIPLES TO GUIDE ME, I SUPPORT -
* Establishing a bi-partisan group of policy experts to offer legislative recommendations. Have deliberations and planning sessions be broadcast nationwide on C-Span. Appoint elder statesman from both parties to participate
* Ideas like the Ryan Roadmap for Retirement Security which includes:
* No Change for Seniors. Preserving the existing Social Security program for those 55 and older
* Consumer Choice. Offering workers under 55 the option of investing over one third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to Federal employees. Includes a property right so they can pass on these assets to their heirs, and a guarantee that total benefits from the personal accounts will not be less than they would have been under the current system
* You Own It. Establishing each personal account as the property of the individual, and the resources accumulated can be passed on to the individual's descendants. This contrasts with current government Social Security benefits, which are subject to reductions or other changes by Congress, and which cannot be passed on. Benefits are tilted in favor of low income individuals who do not have disposable income to invest
* Guarantee of Contributions. Individuals who choose to invest in personal accounts will be ensured every dollar they place into an account will be guaranteed, even after inflation. With the recent market downturn, individuals must be assured their retirement is secure. By guaranteeing the dollars put into an account, individuals can be assured that a large-scale market downturn will not cost them their Social Security personal accounts.
* Soundness of Accounts. Those choosing the personal account option will select from a list of managed investment funds approved by the government for soundness and safety.
* No Change for Survivors and the Disabled. Those receiving survivor and disability benefits will see no change.
* Ensure Social Security fiscal sustainability in perpetuity and not saddle our children and grandchildren with an unsustainable burden
* Eliminating all taxes on Social Security income
* Pay down the debt so we are not wasting $200 billion per year on interest payments and can invest that money into Social Security solvency and further debt reduction
* Placing all Social Security costs, debt, and debt servicing on budget. Stop gimmicks and accounting tricks to hide the real cost of the entitlement
* Automate and eliminate bloated and ineffective Social Security bureaucracy
This is Where my Democrat Opponents Stand -
* Nothing. No mention of Social Security or dealing with the realities of our entitlement crisis.