Social Security leaders: Spend Social Security surplus on Social Security!
Washington,
Jun 22, 2005 -
At a news conference on Capitol Hill today, four Members of the Social Security Subcommittee of Ways and Means announced new legislation to “Spend Social Security dollars on Social Security.” The new measure protects the Social Security surplus by creating accounts that workers would own and that would be fully inheritable.
Calling it a “first step towards stopping the raid on Social Security,” Congressmen Jim McCrery (4th Dist.-La.), Clay Shaw (22nd Dist.-Fl.), Sam Johnson (3rd Dist.-Texas), and Paul Ryan (1st Dist.-Wis.) discussed their intent to introduce the GROW Accounts Act (Growing Real Ownership for Workers).
The bill works to achieve three goals: 1) the Social Security surplus should only be used for Social Security, 2) the surplus should not be used to fund other government programs; and 3) the surplus should not be used to mask the true size of the national debt. Ultimately, the proposal walls off Social Security surplus money from other government spending through the creation of GROW Accounts.
According to the Social Security Trustees, Social Security will run a surplus until 2017. Currently Social Security taxes pay for retiree benefits, as well as benefits for widows, orphans and the disabled. Any funds left over, known as the Social Security surplus, are used for other government spending.
This measure would change that by directing money from the surplus to fund newly created GROW Accounts. People under the age of 55 will have GROW accounts, or can choose to opt out. The accounts will initially be invested in marketable Treasury bonds. This allows a safe and prudent transition period for the development of personal accounts to protect the Social Security surplus.
An independent Board, similar to the one which manages the retirement plan for Federal workers, will manage and administer GROW Accounts. In January 2009, the board will
submit a plan to Congress that would allow for workers to choose other prudent investment options or stay in low-risk marketable treasury bonds. When a person retires, the account balance will be used to help pay Social Security benefits.
Chairman McCrery said, “This bill will provide future retirees with fully inheritable Social Security accounts that can't be spent by Congress, ensuring that taxes paid into Social Security are used for Social Security.”
Congressman Clay Shaw, the immediate-past Chairman of the Social Security Subcommittee said, “This new idea is a good first step toward putting Social Security on a sustainable path. We can all agree that Social Security dollars should be spent on Social Security. I believe that time has come to lay our best thoughts on the table and work towards a clear bipartisan solution, with only the motivation of leaving the Social Security system better than how we found it. It is past time to start thinking about the next generation, not the next election.”
Congressman Sam Johnson said, “It’s just common sense that the funds in the Social Security surplus are spent on Social Security. I am for that and this bill is a first step in that direction. It’s like when you sit down to eat a 28 ounce prime porterhouse steak in Dallas. You just have to do it one bite at a time. This bill is our first bite at bigger reform.”
Congressman Paul Ryan said, “We should all be able to agree that Social Security’s surplus should go to Social Security. By giving workers the choice to put their Social Security surplus in their personal account to be saved for their retirement, this proposal does just that.”
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