Paul Ryan on Social Security

As this week brings us both the announcement of Paul Ryan as Mitt Romney’s running mate and Social Security’s 77th birthday (today, August 14), it seems appropriate to focus our lens on Social Security from Ryan’s perspective.

Ryan has long championed the privatization of social insurance programs. His last two budget blueprints put forth in fiscal 2012 and 2013—both called The Path to Prosperity—would turn Medicare into a system of vouchers that individuals could use to buy private insurance. These vouchers would not keep pace with rising health care costs, forcing seniors to bear an increasingly greater burden of their health care costs in years to come.

Privatization of government programs seems to be a theme with Ryan. On Social Security, Ryan—a Social Security recipient himself as a young man—helped lay the groundwork for George W. Bush’s push to privatize Social Security, as described in a recent New Yorker profile of the congressman. Ryan worked with former Sen. John Sununu (R-NH) to create a plan which was centered on the creation of personal savings accounts. Under the plan, a portion of an individual’s payroll tax contribution would be diverted from the OASDI trust fund into an individual account, which would then be invested. Such a diversion of funds would have decreased Social Security’s revenue and required a transfer of funds from the rest of the budget to fund benefit obligations, as this Center on Budget and Policy Priorities analysis reported. In other words, the Ryan-Sununu plan to bring long-term solvency to Social Security would have required the federal government to borrow heavily to finance promised benefits.

We all know how the story ended: President Bush spent significant political capital promoting a somewhat more cautious version of this plan, going on a “Social Security Road Tour” that ultimately went nowhere. Ryan didn’t end his quest there, however. In fact, the Social Security actuaries have, on their website, analyses of five different Social Security reform plans since 2004 that list Ryan as a key author:

  • In 2004 and twice in 2005 he proposed various iterations of personal savings accounts
  • In both 2008 and in his 2010 Roadmap for America’s Future he proposed a plan that would raise the retirement age and cut benefits for all but the lowest 30 percent of earners through progressive price indexing, while also offering personal savings accounts and calling for transfers of general revenue to assure trust fund solvency.

In his 2012 and 2013 budget blueprints, Ryan was vaguer in his approach to Social Security. In both plans, he mistakenly characterizes Social Security as contributing to the rapid growth of spending on entitlement programs. In the 2012 plan, he suggests Social Security changes be fast-tracked through Congress (currently prohibited by law to protect the program).

Ryan served as a member of President Obama’s Fiscal Commission. Saying that the plan didn’t do enough to control health care costs, Ryan was one of seven members who prevented the commission from attaining the necessary super-majority vote. This led to the release of a plan by the commission’s co-chairs, Erskine Bowles and Alan Simpson, which among other things included draconian cuts to Social Security benefits for most future retirees. Despite his objection to parts of the Bowles-Simpson plan, in his 2013 budget blueprint, ultimately passed by the House as their budget resolution, Ryan praised the guidance of the Fiscal Commission co-chairs in reforming Social Security and called for action to require both the president and Congress to put forward legislation ensuring the solvency of Social Security. Though this may sound reasonable, no other government program is required to have its 75-year solvency assured with each passing year.

Ryan has a long past promoting benefit cuts and privatization for Social Security. Today, on the program’s 77th birthday, we can be thankful that none of these plans have so far been successful. As this video, posted today by the National Academy of Social Insurance highlights, Social Security remains strong and affordable, even as the baby boomers enter into retirement. Together, Social Security and Medicare, which celebrated its 47th birthday earlier this month, are critical to the well-being of millions of families in all 50 states.