Retirement Blog

Finance Blogs » Retirement » Candidates vague on Social Security

Candidates vague on Social Security

By Jennie L. Phipps · Bankrate.com
Wednesday, January 25, 2012
Posted: 5 pm ET

As we enter the full-blown political silly season, it's hard to know where the politicians stand on the one topic that most older people can agree on -- Social Security. For almost everybody living in retirement or getting close to making their retirement planning a reality, Social Security is an important piece.

But nailing down the candidates on how each one of them would handle Social Security isn't easy. Except for Texas Gov. Rick Perry, who dropped out of the race in part because of negative response to his claim that Social Security is a Ponzi scheme, no candidate has forcefully outlined a plan to make Social Security solvent.

Here's what they have said over the past few months:

U.S. Rep. Ron Paul in May of last year said that Social Security was technically unconstitutional because there is no "authority in the constitution for it." Since then, he has suggested that younger workers be allowed to opt out of Social Security taxes and retirement benefits, while maintaining the plan for older workers. "My plan explicitly protects the elderly and the sick in the transition," he says.

Former Massachusetts Gov. Mitt Romney said in a statement, "We must keep the promises made to our current retirees: Their Social Security and Medicare benefits should not be affected." But when Romney addressed the Tea Party last November, he said he would “gradually raise the retirement age to reflect increases in longevity and slow the growth in benefits for higher-income retirees.”

Former Speaker of the House Newt Gingrich in November said that he would give Americans the option to invest in personal savings accounts instead of Social Security. ""Maybe it's not that Social Security is out of money; the politicians are out of ideas," he said.

Former Pennsylvania Sen. Rick Santorum, while campaigning in New Hampshire a few days before the primary, called for immediate cuts to Social Security benefits. "We can't wait 10 years," even though "everybody wants to," Santorum said.

President Barack Obama has been very vague about his plans for Social Security, but last year he discussed with Republican House Speaker John Boehner of Ohio possible reductions in benefits as part of the debt-reduction deal. That deal never went anywhere. In last night's State of the Union address, he called for reforms to Social Security but didn't elaborate.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
5 Comments
michael94700
January 26, 2012 at 2:08 pm

Social Security is a huge piece of the retirement puzzle for many people and it is alarming that its existence is on such shaky ground. If the government were to let you put money into private accounts what happens to the money you have already put into the system up to this point? Do you get a partial Social Security check based on what you put in so far and a private account from this point forward? If your current Social Security contribution is now put into a private account who pays for the Baby Boomers? This is a huge problem that no politician will actually attempt to tackle. I am currently 41 years old and am planning on getting 75% of what I should be getting for SSI. My advice is save as much as you can yourselves because the long term health of the Social Security system is hard to predict.

Devin
January 26, 2012 at 11:44 am

Don't buy the alarmist hype on SS. Barring something like a complete collapse of the US govt, the worst-case scenarios have SS paying out only 78% of the promised benefits beginning about 20 years from now. That's not great, but as a worst-case scenario, it's a lot better than the worst-case scenario from just about any other investment, which is you get 0% back. Of course, if the US govt DOES completely collapse, all those other investments (stocks, bonds, cash sitting in a bank) will all be pretty worthless as well.

It's also funny that the general fund borrowed money from Social Security for almost 30 years, and yet nobody seems to consider that when the trust fund runs out of money in ~20 years that Social Security could remain solvent by borrowing money from the general fund for a decade or two. After that (around 2050 or so), demographics will solve the problem. When generation Y is in their 50s (their peak earning years), there will be enough of them to support generation X because gen X is much smaller. And the baby boomers will have mostly passed on by then. It's simple demographics.

I'm amazed at how many people my age (under 40) buy the lie that SS won't be there when we retire. Of course, it's a self-fulfilling prophecy. The idea by those who propogate this myth is to get enough young people to not believe SS will be there that we'll vote to eliminate our own benefits and implement a plan whereby we put all our retirement savings in the hands of Wall St traders. The SS system isn't perfect, but I trust it more than I trust Bernie Madoff.

Ray
January 26, 2012 at 10:37 am

The bottom line: Money begets money. The corporate candidates are fed primarily by big corporate money (yes, Barack as well). The decision makers at the big corporations that fund the corporate candidates do NOT need SS.

Gambit
January 26, 2012 at 9:25 am

Oh, Jennie, the writing is almost on the wall, and you call the rest of us alarmists or chicken littles, and yet... your own article proves the inevitable... no politician is going to be clear about Social Security, because they can't even guarantee it'll be around in the next 4 years.

Sure, we might expect it to be around for the next 20, but it's not a certainty that it WILL be there by the end of the 20.

Thank you, for writing this article after all the continuing disbelief from your behalf about the tenuous nature of Social Security and how incredibly fragile this issue has become.

rjdegruiter
January 25, 2012 at 7:53 pm

It seems very easy for politicians to start cutting Social Security Benefits when cut backs are put on the table for debate in the effort to save our country from economic chaos. This is an easy choice for the politician as older people are a minority with no voice or leadership. AARP? Common, they are often in partnership with the Government as long as they are a money making enterprice. If I was a 30 something year old worker, why should I continue to have to make contributions to a system that everyone is convinced will no longer exist by the time I am 65 years old? And last but not least, Politicians do not need Social Security. They retire at full pay! What is wrong with that picuture? When you compare their retirement with our men and women in the military, who receive 50% of their Base pay after 20 years of duty. And not many politicians get shot at or deploy to foreign countries for back to back combat tours lasting almost a year at the time.