McCotter Files Legislation to Save Social Security

Washington, D.C. –Today, Monday, September 12, 2011 U.S. Representative Thaddeus G. McCotter (MI-11) will introduce legislation designed to save the Social Security retirement and disability trust funds from insolvency, which the Social Security Board of Trustees forecasts may otherwise occur as early as 2029.

The Trustees’ 2011 Annual Report projects insolvency is likely to occur in 2036 given the most reliable current assumptions.  The McCotter plan salvages both the Old Age and the Disability trust funds from that projected insolvency without reducing benefits, raising taxes, or increasing the age of retirement eligibility.

Rep. McCotter’s legislation achieves this through the creation of personal savings accounts eligible for reasonably flexible investment in the free market, offered to all workers aged 50 and younger.  Participation is voluntary, and a minimum return on investment is guaranteed. 

Because the personal investment accounts replace as much as 50% of each participating worker’s retirement benefit, the trust funds experience significant relief as soon as the first participants commence retirement.  Benefits for current retirees will be unaffected, as will future benefits for workers above the age of 50, and those who choose not to participate.

Funding for the personal savings accounts will come not from new taxes (which the legislation specifically forbids), but from efficiencies realized by block granting specific federal programs to the states, and from savings realized from the elimination of other federal programs to be identified in companion legislation.

The Chief Actuary of Social Security has confirmed that the legislation, if implemented, would eliminate all future deficits while satisfying all current obligations.  According to former Reagan administration appointee Peter J. Ferrara (author of four books on Social Security reform), if the McCotter plan were enacted it would generate “the single largest spending and debt reductions of government in world history.” Rep. McCotter’s legislation enjoys the support of Americans for Tax Reform, Americans for Prosperity, and 60Plus.

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