Letter to Gov. Rick Perry on Social Security Comments
|Written by Dean Baker|
|Monday, 29 August 2011 14:45|
The Honorable Rick Perry
Dear Governor Perry,
When asked about Social Security during a recent campaign stop in Iowa, you said:
"It is a Ponzi scheme for these young people. The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie," Perry said. "It is a monstrous lie on this generation, and we can't do that to them."
With all due respect, this is not true. The recommendations of the National Commission on Social Security Reform in 1983 led to the growth of a large surplus in Social Security. This surplus was used to buy bonds and now Social Security holds more than $2.6 trillion in government bonds. As a result, the Congressional Budget Office’s projections show that the program will maintain full solvency through the year 2038.
Even if Congress never makes any changes to the program, Social Security will be able to pay slightly more than 80 percent of scheduled benefits from then on. This means, for example, that if your children — currently 28 and 25, respectively — were to retire at age 67 and do as well as you have in their working careers, they would receive $38,145 and $39,410 (in 2011 dollars) each, every year, for the rest of their lives. It is clearly inaccurate to say that this program will not exist for young people.
With Social Security sure to be a topic of debate over the course of your campaign, I hope you and your staff will have the opportunity to further review the design and finances of the program. If you would like any additional background on the program, I would be happy to assist you.