Social Security Debate: What to do about it?
Free market defenders fight for ownership, while reform opponents want to increase biggest government program ever.
NEW YORK For an issue that many in the media are calling dead,
the June 14, 2005, Social Security debate at City University of New
York was quite lively. Supporters of reform warned of a situation
ready to implode and called for ownership while opponents defended
Social Security as the most successful program in the nations
The event brought together leading supporters and opponents of reform to discuss what Pat Toomey called the biggest government program in the history of the world. Toomey, president of the Club for Growth, led off the debate in front of an audience of more than 200 by posing the question, What to do about it? That set in motion a discussion that included most of the major talking points from both sides of the reform argument.
Herman Cain championed 'ownership' at the debate.
While Toomey began the event focusing on common ground, there was
little overall agreement about the need for Social Security reform
or even the current financial situation of the program. Certner
argued that the program has enough money basically to pay full
benefits for about four more decades. Shelton took that number even
further and claimed that even conservatives argue that the Social
Security life expectancy and solvency expectancy will go on for at
least another 45 to 50 years. Cain disagreed and pointed out that
the government starts having a cash flow problem in 2017 when the
cost of benefits will be higher than what is paid in Social Security
At that point, the government supposedly would turn to the Social Security Trust Fund, but Toomey added, We heard earlier on that even the opponents of reform acknowledge that Social Security system has to cut benefits by 25 percent and thats if you think the trust fund has any meaning, which it doesnt.
Cain added that the problem is imminent. Now we are faced with a situation that will implode if we dont do something about it, he said. It is high time that we face the problem and fix the problem.
Risk and Costs
According to a Business & Media Institute study on Social Security media
coverage, risk and transition costs are two of the most commonly
used liberal talking points on the TV news and they figured
prominently in this debate, as well.
Certner argued strongly against personal accounts, saying that the program isnt set up for that kind of plan. Social Security is not the system for taking on risk, he said, urging people to Think of it as an insurance policy.
Toomey explained that risk is guaranteed even with the current system. The only way you can say Social Security doesnt have a risk is if you acknowledge the certain loss. I mean, the fact that this system cannot deliver on its promised benefits, nobody says it can, thats a pretty bad deal.
Cain downplayed the question of risk, pointing out that personal retirement accounts work for Galveston and three other counties in Texas, 3.4 million federal employees in the Thrift Savings Plan and the entire nation of Chile. He explained that the plans would offer limited options and that no proposed reform legislation would allow people to invest a portion of payroll taxes in individual stocks.
The cost of a switchover to personal accounts bothered Certner, who claimed that such a plan would result in trillions of dollars of new debt. Toomey countered by explaining that paying more now would save trillions of dollars down the road.
The Free Market Case
Ownership and choice were the foundation for the conservative
position in the debate. Cain explained his view of reform: Our
founding fathers said we are all endowed by our creator with certain
unalienable rights. That among these are life, liberty
He emphasized that the personal accounts being discussed were optional, even if many in the media ignored that point. Unfortunately, it appears as if the media and some of those who want to put Band-aids on it, simply seem to be ignoring this word optional.
Toomey emphasized the poor economics of the current Social Security system. What used to be a great deal for workers is now a really terrible deal for younger workers and future retirees, he explained.
The Liberal Position
Both Certner and Shelton defended Social Security in its current
form as what Certner called a program that is loved by the American
people. Rather than argue for reform, both speakers advocated more
protection for the program. Shelton summed it up: What were
looking for is a safety net.
Certner proposed raising the current wage base of Social Security, in effect raising taxes on anyone who makes more than $90,000 annually. He also advocated putting Social Security taxes into other assets like the stock market which received a strong response from Toomey.
Those two things alone would be absolutely devastating, Toomey said. He explained that the tax increase would harm economic growth and called the plan to have the government investing in the markets a frightening idea. That is actually the definition of socialism, said Toomey.
Shelton and Certner repeatedly emphasized all three portions of the Social Security program retirement, survivor and disability benefits and argued that they needed to be protected. Americans of colorare more than likely to depend on Social Security for our economic well being, if not our very survival, said Shelton.
Shelton added that his advice was to slow down before pursuing reckless changes being promoted by the White House. This is not the administration that should be making any decisions about our money, he concluded. Cain reminded the audience that money being taken in taxes belonged to the taxpayers, not the government. Its their money in the first place.
Toomey summed up the conservative side. I want to give workers a choice. I want that decision to be in the hands of an individual worker to decide how his retirement will work rather than have the government force him into a system that he doesnt believe is going to work.
The event was organized by The Donald & Paula Smith Family Foundation, which defends free speech and a free society through the critical examination of ideas, sponsoring debates and related activities in the New York area.