by Kerry Thomas
May 23, 2008
The internet and mainstream media are full of stories claiming John McCain threatens Social Security. That’s nothing new. The Democrats use this rhetoric every election. “(Fill in the name of any Republican candidate) will cut your Social Security” is a standard in the Democrat playbook.
The reality is that it is the Democrats who are threatening
Social Security.
We’ve known for years that the Social Security system faces
a structural financial crisis. The
first of the Baby Boomers are beginning to retire already. Their grandchildren are the ones who are
paying for their Social Security retirement benefits, and there just aren’t
enough of these kids to pay the bill.
Where once we had 10 working people to pay the benefits of
each retiree, we now have three. And in
a few short years, that number will be down to two.
Currently, each employee pays 15.3% of their paycheck to the
Social Security system. (Remember, the
7.65% that is deducted from your paycheck is matched by your employer. That amount is part of your pay, even though
you never see it.)
In order to maintain the current level of benefits paid from
the Social Security system, estimates are that as much as 40% of future
earnings will have to be taxed from every employees’ paycheck. That’s just the FICA tax; it doesn’t include
any other taxes on your paycheck.
And Congress keeps adding new programs to the Social
Security system. New benefits for
children. New benefits for the
disabled. Even new benefits for illegal
immigrants.
Republicans have repeatedly proposed various private sector
solutions to this structural Social Security deficit. Most of these solutions include the option of allowing you the
choice to remain in the current system, or to defer a portion of your Social
Security taxes into a private retirement account, held in your name.
Currently in Congress, Wisconsin
Congressman Paul Ryan is proposing his “Roadmap For America’s
Future.”
This plan includes a provision that will “preserve
the existing Social Security program for those 55 or older.” It also “offers 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.”
The Social Security Trust Fund’s accounts have your name on
them, but the taxes paid into that fund belong to the government. It’s not your money. All you have is a government promise to one
day pay you something in the future.
That money can be used in any manner Congress chooses.
Despite public pronouncements to the contrary, there is no
“Social Security Lockbox.” The surplus
monies that we’ve all been paying into the Social Security Trust Fund have all
been borrowed to pay for current government spending. The Trust Fund contains only worthless paper IOUs. How do you suppose they plan to pay off
those IOUs? That’s right – higher
taxes.
Under Republican proposals such as Ryan’s, you control your
retirement funds. You direct your
retirement funds to be invested as you see fit.
Years ago, when participation in the Social Security system
was still voluntary, one Texas municipality opted out, choosing instead to
invest their employees’ retirement funds in private sector instruments. Today, those retirees see an average monthly
retirement check of close to $8,000.
The average monthly Social Security retirement check is about $1000.
Yet every time such a proposal is brought up, it is the
Democrats in Congress who demagogue such proposals as a threat to Social
Security. Republicans propose to give
Americans a choice in their financial futures.
Democrats think you’re too stupid to make such important decisions for
yourself, without the helping hand of Big Brother to guide you.
We know the problem is looming. It’s not going away. And
it gets bigger every day.
By their refusal to address the problem in a sensible way,
in a manner that will actually work, the Democrats are compounding the problem.
So the next time you hear a Democrat spouting their tired
rhetoric about Republicans threatening Social Security, just remember. It is the Democrats who actually are a
direct threat to your Social Security.