Democrats are eagerly renewing their fight against privatizing Social Security now that Republican presidential candidate Mitt Romney has picked Rep. Paul Ryan as his running mate. It was a fight that didn’t go well for the GOP when President George W. Bush pushed the idea in 2005.
In his 2010 “Road Map for America’s Future,” the Wisconsin congressman proposed a plan to allow younger workers to divert more than one-third of their Social Security taxes into personal accounts that they would own and could will to their heirs.
Mr. Ryan wrote that the accounts would provide workers an opportunity “to build a significant nest egg for retirement that far exceeds what the current program can provide.” Workers 55 and older would stay in the current system.
Mr. Romney hasn’t embraced the proposal, and Mr. Ryan, chairman of the House Budget Committee, didn’t include it in either of the federal budgets passed by House Republicans the past two years. But now that Mr. Ryan is running for vice president, Democrats hope to capitalize on the issue.
Mr. Bush’s proposal for private accounts received a chilly reception from members in both parties in Congress, though Mr. Ryan embraced it. Democrats used the issue against GOP congressional candidates in the 2006 election, when they regained control of the House and Senate.
“The very last thing we ought to be doing is putting at risk the retirement security of millions of America’s seniors,” said Rep. Debbie Wasserman Schultz of Florida, who heads the Democratic National Committee.
Until now, Social Security had been largely absent from the presidential campaign. President Obama has yet to lay out a detailed plan for addressing the issue, and his silence is drawing criticism from advocates who supported him in the past.
Mr. Romney has been more forthcoming with proposals, but Social Security has not been a big part of his campaign, either.
Mr. Romney, in his book, “No Apology,” said he liked the idea of personal accounts. But, he wrote, “Given the volatility of investment values that we have just experienced, I would prefer that individual accounts were added to Social Security, not diverted from it, and that they were voluntary.”
Mr. Romney’s current plan for Social Security doesn’t mention personal accounts. Instead, he proposes a gradual increase in the retirement age to account for increasing life expectancy. For future generations, Mr. Romney would slow the growth of benefits “for those with higher incomes.”
Mr. Romney says tax increases should be off the table, and that current beneficiaries and those near retirement should be spared from cuts.
“Mitt Romney and Paul support gradual reforms to Social Security that protect current beneficiaries from any benefit disruptions while strengthening the program to ensure that it doesn’t go bankrupt,” Romney campaign spokesman Ryan Williams said.
The trustees who oversee Social Security say the trust funds that support the program will run dry in 2033. At that point, Social Security will generate only enough tax revenue to pay about 75 percent of benefits, triggering automatic cuts unless Congress acts.