House GOP Social Security Privatizers Fear Monger Over Trustees Report

May 16, 2011 11:49 am ET — Matt Gertz

On Friday, the Social Security and Medicare Boards of Trustees released the latest iteration of their annual report on the health of the program, reporting that Social Security will be able to pay full benefits until 2036, and thereafter roughly three-quarters of benefits through 2085. In response, the House GOP leaders with power over the program have released a statement calling for President Obama and Congress to "act now" and "take the long overdue steps to strengthen these vital programs."

All three members — Ways and Means Chairman Dave Camp (R-MI), Health Subcommittee Chairman Wally Herger (R-CA), and Social Security Subcommittee Chairman Sam Johnson (R-TX) — have supported Social Security partial privatization, which would actually exacerbate the problem of long-term Social Security solvency.

In their statement, the GOP congressmen write:

Today's report makes it clearer than ever that doing nothing is not an option.  The failure to act means current, as well as future beneficiaries, will face significant cuts even sooner than previously estimated.  We call on the President and all of our colleagues in the House and Senate to act now and take the long overdue steps to strengthen these vital programs.  It's what Americans expect of us, it's what taxpayers demand and it's what our children deserve.

According to his website, Camp supports "voluntary personal accounts for younger workers that would allow them to build a nest egg for retirement that they would own and control, and could pass on to their families," which he claims would "permanently strengthen Social Security, without changing benefits for those now in or near retirement, and without raising payroll taxes on workers."

Such accounts already exist — they're called 401(k)s. But if young workers are allowed to divert their payroll taxes into such privatized accounts — as in the plans sponsored by Johnson and Herger — those funds would be removed from the money available to pay Social Security benefits from current retirees. Far from helping the long-term solvency problem, such plans only make it much worse, as even Dick Cheney has acknowledged.

Johnson and Herger both sponsored similar legislative efforts during President Bush's 2005 push for partial privatization. Interestingly, while Herger continues to trumpet his support for "voluntary personal retirement accounts within Social Security," Johnson's House and campaign websites say only that he wants to "strengthen" and "fix" the program. What type of fix does he want? He doesn't say, but he definitely wants the strengthening to happen "without tax hikes."

Of course, if revenue enhancements are off the table — even for upper-income earners who only pay payroll taxes on the first $106,800 on their income — the only way to improve Social Security's solvency is with the very benefit cuts Johnson, Camp, and Herger claim to oppose.