Ryan Reintroduces Legislation to Strengthen Social Security for the Future
April 20, 2005
Proposal Would Achieve Solvency, Prevent Government Raids on Social Security, Give Younger Workers the Chance to Get as Good a Benefit as Today's Seniors, Pays Off Entire Social Security Debt
WASHINGTON - Wisconsin's First District Congressman Paul Ryan is reintroducing legislation today to put Social Security on solid footing for the future and ensure that the program will help future generations achieve a more secure retirement, as it has for past and present retirees. This bill - the Social Security Personal Savings Guarantee and Prosperity Act - closely resembles Social Security reform legislation that Ryan introduced last year. Senator Sununu of New Hampshire is introducing an identical measure in the U.S. Senate today.
The plan would maintain Social Security's safety net, while giving younger workers the opportunity to put part of their payroll tax contributions into a personal account within the Social Security system that would enable them to earn a decent return on their investment in the program. This would reverse the decline in Social Security's rate of return and help put the program back on track to achieve lasting solvency. According to the Social Security Actuary's official analysis of this plan, permanent and growing Social Security surpluses would begin in 2038, resulting in permanent solvency in 2051. Currently, Social Security begins permanent deficits in 2017 and becomes insolvent in 2041. The legislation would also accomplish the goal of the lockbox Ryan has continuously fought for which would protect the Social Security trust fund from being spent on unrelated government programs.
"There is no denying that Social Security faces a serious financial crunch as the baby boomers retire and fewer workers are supporting each retiree through their payroll taxes. And every year we delay finding a solution to this problem, roughly $600 billion is added to the debt the government owes to Social Security. By acting now, we can make Social Security solvent for good, preserve its safety net - which has been so important for people of all ages, and make sure today's young people and their children can count on a respectable rate of return like their grandparents have," Ryan said.
"Our proposal will also give every American worker the chance to own a substantial part of their Social Security retirement benefit. That's an investment in their retirement security that the government cannot take away, and it's something they can pass on when they die to their loved ones," Ryan said.
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"In order to keep Social Security strong for all generations, we have to address the demographic shift that has occurred and will accelerate when the first of the baby boomers begin to retire in 2008. We also need to reverse the decline in the rate of return workers get on their contributions to Social Security," Ryan said. "When the program was created, the rate of return on a 40-year-old worker's investment in the system was about 8 percent. In contrast, today's young children can expect to get a negative 1 percent return on their tax payments into the system, and that's not fair. Voluntary personal accounts are the key to improving the rate of return and strengthening Social Security for the long haul."