DeMint Introduces Social Security Reform Bill

October 6, 2003

On Thursday, September 25, Rep. Jim DeMint (R-S.C.) reintroduced the Social Security Savings Act, a plan that includes provisions to protect promised benefits for near retirees and allow workers the option of saving a large portion of their Social Security payroll tax in personal savings accounts they can own and pass on to their families. Furthermore, the act returns the system to solvency and saves taxpayers nearly $18 trillion over the next 75 years.

In a prepared release, DeMint states: "Social Security reform is a defining challenge for this generation, and is arguable the greatest domestic policy challenge of our time. If we succeed, we preserve and strengthen Social Security for future generations. If we fail, we risk breaking our promise to seniors and crippling future generations with higher taxes and an insecure retirement."

The news release states: "The Social Security Savings Act allows individuals, for the first time, to truly own a significant portion of their contribution to the nation's retirement system. Americans currently pay into Social Security their entire lives but have no legal right to pass on those retirement dollars to their spouse or children. This act would correct this by allowing Americans to set up individual accounts within the Social Security system that include broad investment options and guaranteed benefits. Under this legislation, every American would be able to access a retirement system almost identical to the system (Thrift Savings Plan) available to every member of Congress and federal employee."

The release continues: "The [Social Security Savings Act] helps low-income workers create wealth by establishing a sliding scale that allows lower-income workers an opportunity to direct a greater share of their Social Security contribution to individual accounts, which will generate a higher rate of return than traditional Social Security.

According to DeMint: "If Democrats and Republicans are serious about closing the wealth gap and helping low- and middle-income Americans create wealth, we must work together to strengthen Social Security with personal savings accounts. America has spent trillions on programs to address poverty, but very little to help low-income Americans create wealth and own a share of the future."

Democrat and new advocate of individual accounts Harold Ford Jr. of Tennessee agrees: "The key to retirement security and upward social mobility is wealth creation. Rep. DeMint has a proposal that would allow workers to begin building wealth by investing part of their Social Security taxes in individual retirement accounts."

Rep. Ford recently stated, "In fact, over the long term, the costliest option is maintaining the existing system."

DeMint's plan, officially scored by the Social Security Administration, saves taxpayers nearly $18 trillion over 75 years. The initial 10-year transition of the plan is $444 billion, which, according to Citizens for a Sound Economy, "is a drop in the bucket when you consider that Social Security will own an unfunded liability of $26.1 trillion over the next 75 years if the system isn't changed."

DeMint said: "Members of Congress can disagree about how to 'pay for' real reform but we need to be honest with the American people. The real question should be: 'How can we possibly pay for maintaining the current system and its expected $26.1 trillion deficit?' We only have three options to save Social Security–restrain the growth of government spending, raise taxes or cut benefits. I believe the first option is only option.

"Continued inaction on Social Security could leave a legacy of crippling debt and high taxes. I applaud President Bush for his commitment to Social Security reform, and his call for an 'ownership society' that will help all families, especially low-income families, create real wealth. It's time for Congress to modernize Social Security and prepare it for the challenges of 2030, not restrict it to the conditions of 1930. My bill gives a guarantee to those who need it, choice to those who want it, and retirement security for everyone."

Click on the DeMint Social Security Savings Plan for more information, including additional provisions and proposals on how to finance the transition to private accounts.

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