Paul Ryan on Social Security
Congressman Ryan has been talking about the need to address Social Security and offering solutions for that system since he came into office. Since that time he has remained consistent in his support for private accounts for those who are under the age of 55 and chose to enter that system and keeping the current system in place for those over 55.
In 2005, Congressman Ryan spoke about a report issued by the Social Security and Medicare Trustees that showed the program was in financial trouble. He noted that if the problem was not addressed soon, it would lead to higher taxes, substantial benefit cuts, ever-increasing government debt, or a combination of these for future generations.
To address the solvency problem in Social Security, Congressman Ryan proposed the Social Security Personal Savings Guarantee and Prosperity Act just a month after his 2005 speech on the need to address Social Security. This plan would keep social security in place for those above the age of 55 and allow those under that age to chose to enter a system where they are allowed to place more and more of their funds into private accounts. These accounts can be passed on to heirs and prevents congress from using these funds to pay for other items.
Under this legislation, personal accounts would be phased in to help ease the transition. From 2006-2015, younger workers could devote to their tax-free personal accounts 5 percentage points of the current 12.4% Social Security payroll tax on the first $10,000 of wages each year and 2.5 percentage points on taxable wages above that. Starting in 2016, workers would be able to shift 10 percentage points of the current 12.4% on the first $10,000 in wages and 5 percentage points on taxable wages above that. Once the accounts are fully phased in, the average account contribution among workers would be 6.4 percent of their Social Security payroll tax. This progressive account structure allows lower income workers to keep more of their FICA taxes in their personal account than higher income workers. The accounts are managed according to the age of the person who owns it with younger people investing with higher risk and older people moved to lower risk investments. It appears that according to this plan, the 6.4% of every person's income that is paid into Social Security by the employer is still paid into that system and is lost by the employee.
Also in 2005, Congressman Ryan supported the GROW Accounts act. This legislation would have directed surplus funds from the SS system into newly created GROW Accounts. People under the age of 55 will have GROW accounts, or can choose to opt out. The accounts would initially be invested in marketable Treasury bonds and an independent Board, similar to the one which manages the retirement plan for Federal workers, would manage and administer GROW Accounts.
The Path to Prosperity
Also known as the "Paul Ryan Plan," the Path to Prosperity is legislaiton that Congressman Ryan has put forward to address a wide range of issues and entitlements. Social Security is one of those entitlements. The plan is based upon the reports which show that Social Security will soon begin paying out more than it takes in and that this combined with the fact that the reserve fund consists of nothing but IOUs will hurt the US economy for generations.
To address Social Security, Congressman Ryan proposes the same sort of private accounts system as he did in 2005. Those over 55 remain in the SS plan and those under that age can chose to enter the new system. Those entering this new system are allowed to divert more and more of the 6.4 percent of the employee paid half of Social Security into those accounts and pay more and more of their own funds into them tax free. Those accounts are invested according to age, and it appears that the employer paid half of Social Security is given to maintain the current Social Security system benefits. The accounts that each person invests in are guaranteed by the government in the event of excess loss.
2005 Trustees Fund
In March of 2005, Congressman Ryan issued a press statement noting that social security needed to be reformed to prevent a situation where future generations are paying for both the IOUs that have been placed in the system over the last few decades and current benefits at the same time.
In April of 2005, Congressman Ryan issued a press statement noting his support for the Social Security Personal Savings Guarantee and Prosperity Act. That plan would allow younger workers to put some of their income into a personal account.
GROW Accounts Act
In June of 2005, Congressman Ryan issued a press statement noting his support for legislation called the GROW Accounts Act. This legislation would give workers under the age of 55 the ability to place a portion of their Social Security benefits into personal accounts.
The Need for Reform
In March of 2008, Congressman Ryan issued a press statement noting a recent report on the financial status of social security and the need to reform social security and Medicare before it is too late.
SS Actuaries Show the Ryan Plan Saves It
In April of 2010, Congressman Ryan released a press statement noting a recent report released by the Chief Actuary for the Social Security Administration. That report showed that Congressman Ryan's plan would pay off the long-run actuarial deficit in Social Security.
Official Website Statements
Campaign Website Statements
Comprehensive Retirement Security and Pension Reform Act of 2001
In 2001, the House voted on a bill that would raise the amount individuals may contribute to traditional and Roth Individual Retirement Accounts and to 401[k] plans and make pensions plans more portable. The bill passed the house in a 407-24 vote but was altered in the Senate. Paul Ryan voted in favor of the Comprehensive Retirement Security and Pension Reform Act of 2001.
Paul Ryan voted in favor of the Comprehensive Retirement Security and Pension Reform Act of 2001.
Social Security and Medicare Safe Deposit Box Act of 1999
In 2000, the House voted on a bill that would make it out of order to consider a budget that set forth an on-budget deficit for any fiscal year for either the overall budget or social security. In other words, the government could not go into a year with a budget that it knew spent more money than the government took in. The bill failed in a 205-222 vote. Paul Ryan voted against the Social Security and Medicare Safe Deposit Box Act of 1999.
Paul Ryan voted against the Social Security and Medicare Safe Deposit Box Act of 1999.
Sponsored and Cosponsored Legislation
The Social Security Personal Savings Guarantee and Prosperity Act of 2005 would have created private savings accounts for anyone born after 1950.
Amends part D (Child Support and Establishment of Paternity) of title IV of the Social Security Act to revise requirements for the pass-through of child support collected on behalf of families receiving assistance under the program of block grants to states for temporary assistance for needy families (TANF). Requires pass-through to a family receiving TANF of the total amount of collected child support. (Currently the federal government receives its share and the state retains or distributes to the family the state share of such child support.) Requires payment to: (1) the federal government of its share of foster care maintenance payments; (2) the state for retention, or distribution to the family, of the state share of such payments; and (3) the family of any remaining amount.
This legislation, proposed by Congressman Paul Ryan was an early precursor of the Social Security section of the Path to Prosperity - also known as the Paul Ryan Plan. This legislation allows for people under the age of 55 to place some of their funds into a private account system if they chose to do so. The system creates a tiered set of accounts and invests those accounts according to the age of the person, adjusting risk accordningly. It ensures that no funds paid into social security are used for other spending items.