Pack your toothbrush, you're going to jail
As Congress debates the future of Social Security, I thought you would be interested in reading an article I wrote about this critical program and the importance of preserving Social Security for future generations. The article below appeared in today's edition of the Tallahassee Democrat. Please feel free to forward this message to anyone else you think may be interested, and I hope you will take the time to visit my website at www.house.gov/jimdavis.
"In Florida and nationwide, countless retirees have come to realize that they may outlive both their savings and good health. With more than three million Floridians receiving benefits, Social Security has become a virtual lifesaver in our State. So as Congress and the President consider the challenges facing Social Security and how to preserve the long term viability of the program, they should follow the advice of their own doctors who abide by the oath 'Above all, do no harm.'"
"As part of any debate on reforming Social Security, Congress and the President must first agree on the magnitude of the problem. The President likes to talk about Social Security as if it has life-threatening pneumonia. In fact, Social Security has a cold, which must be monitored and carefully treated before it becomes a serious illness.
"The non-partisan Congressional Budget Office (CBO) states that Social Security will remain fully solvent until 2020. At that point, due to the growing number of retirees, Social Security payroll taxes will not be sufficient to meet the needs of beneficiaries, and Social Security must begin drawing on the trust fund make up the difference. Fortunately, the Social Security Administration predicts that in 2020 the trust fund will contain $5.8 trillion. The CBO estimates that these reserves will keep Social Security operating until 2052.
"Clearly steps must be taken to ensure that Social Security's promise is kept for future generations. However, the President's prescription of establishing private Social Security accounts is more likely to worsen the program's condition.
"Social Security benefits are funded through a 12.4 percent payroll tax, divided equally between employees and employers. Under the President's proposal, current workers could divert up to 4 percent of that 12.4 percent tax to private accounts. This would create a 30 percent shortfall in Social security funds used to pay current retirees' benefits. Private accounts Could actually undermine Social Security and worsen its financial troubles.
"To make matters worse, the CBO estimates that this shortfall will drive up the federal debt by as much as $2 trillion over the next ten years alone, and the President has offered no plan on how to cover these costs.
"Florida's economic prosperity has been closely tied to the low interest rates that throughout the last decade have allowed small businesses to secure loans, families to take on home loans and young people to go to college with the help of student loans. Driving up the federal debt will increase interest rates and erode investors' confidence in our economy, adding a second burden on the future generations forced to pay off the debt.
"Furthermore, even if the cost of the President's plan was magically covered, retirees may gain nothing from private accounts. Due to the administrative cost of accounts, monthly benefits will only increase if accounts grow at a rate of 3 percent above the inflation rate, and if accounts earn less than that amount, monthly benefits will decrease.
"Congress and the President should not reform Social Security at the expense of our nation's economic well being. And if the goal is to preserve Social Security for the sake of future generations, we should be sure that any reforms do not leave them with a legacy of unpaid debts, or put their benefits at risk.
"Instead, we must have an open and honest discussion about the challenges facing Social Security, ways to preserve the program for the future and the full consequences of all reform proposals. We can start by exploring ways to increase returns on Social Security trust fund investments or increase the amount of individual income that is subject to Social Security taxes.
"Most importantly, Americans of all ages must be part of the discussion and the search for a solution."
(You have received this email because you subscribed to my e-mail
updates, authorizing me to send to your inbox periodic e-mail updates from my Congressional office. If you would like to be removed from my e-mail update list, please send your name and address to FLDistrict11@mail.house.gov and type "remove" in the subject line.)
Member of Congress
Dear Mr. Davis:
I am fine with privatization of social security. I personally don't need to worry about it, because, thanks to your support of McCain-Feingold, I'll be spending my life in jail and being supported on taxpayer money.
Nice going, sir.
You could make amends by working to have this repealed. Since you were an original supporter, your change of heart would carry weight.
More on this at The Captain's Quarters.