Issue Position: Social Security
As Congress discusses various Social Security reform proposals, it is critical for Oklahomans to understand the most risky option is to do nothing, thereby allowing the system to collapse. The unfortunate reality is that under the current system, Social Security is broke with millions of baby boomers now eligible to receive benefits. In fact, due to the onslaught of early retirements caused by the down economy, Social Security is expected to run deficits in 2010 and 2011, only to return to surpluses for a few short years before permanently running to deficits in 2015.
The trust fund is now projected to be exhausted in 2037, at which point the system will only collect enough revenue to pay 78 percent of promised benefits. The "trust fund" of Social Security, which many politicians claim will keep Social Security solvent, actually contains no real dollars and simply does not exist.
The costs of inaction are staggering. Refusing to fix Social Security will trigger either massive benefit cuts, a doubling of the payroll tax or both. Each year we do not address this impending crisis costs every citizen under 55 approximately $2,700 in additional taxes.
In order to maintain the longevity of Social Security and protect the benefits promised to current and future retirees, Congress must enact long-term reforms. For any reform plan to receive my support, it must be totally voluntary and must provide guaranteed benefits. Many citizens are not aware under our current system, Social Security benefits are not guaranteed.
Personal retirement accounts should be an option for workers. With a personal retirement account, a worker's money will be invested in safe, low-cost, broad-based funds that will allow the individual to earn an expected return of 6.5 percent after inflation, which is four times the average rate of return in the current system. These accounts would be totally voluntary. No one would be required to participate.
I support personal retirement accounts because they would be a stable non-taxable, nest egg workers could use during retirement or pass on to their family. Most importantly, the money in personal retirement accounts could not be spent by politicians.
Doing nothing to fix the Social Security system may cause our children and grandchildren to be the first generation of Americans to inherit a lower standard of living than the previous generation. Congress must act now to save and protect Social Security.