Robert L. Ehrlich, Jr. (R)
Statement by Congressman Robert L. Ehrlich, Jr. (MD-R) on the need to reform the Social Security program
The Social Security program is perhaps the greatest domestic initiative in our country's history. Continued success, however, requires an evolution to keep pace with the changes in the make up of both Social Security recipients and the workers contributing to the Social Security fund. Failure to keep pace -- the status quo -- will mean an end of the program. I am committed to the government promise to ensure a retirement income to every American.
I oppose raising Social Security payroll taxes and cutting Social Security benefits to retirees and persons approaching retirement. The only viable alternative is to seek ways to increase the rate of return workers receive on the money deducted from their pay checks and paid into the Social Security fund.
Currently, workers pay 12.4% of their salaries into the Social Security fund; the average rate of return on the fund is an appallingly low 2%. Accordingly, the only way to avoid raising the payroll tax or cutting benefits is to increase the rate of return.
The plan I support is simple: allow workers to voluntarily invest a portion of the 12.4% payroll tax in personal retirement accounts. This plan would permit workers to define their own investment goals within broad parameters established by the Social Security system to ensure the safety of assets and allocate a portion of their retirement withholdings to investments of their choice. The balance of the payroll tax not invested in personal retirement accounts would be paid into the Social Security fund. A balanced personal retirement account portfolio would be expected to generate, on average, a 6% return. Over the long run, with compounded interest, the account would provide more than enough retirement income to supplement regular Social Security benefits.
This is a bipartisan issue. By 2015, the system will reach insolvency as benefits exceed contributions for the first time. Members of Congress are committed to working together to fix the problem.