Rick Perry: Social Security Should Offer Private Accounts
WASHINGTON -- Texas Gov. Rick Perry has been a harsh critic of Social Security on the campaign trail, but has largely avoided putting forward particular solutions. On "Fox News Sunday," he offered a glimpse of where he'd like the program to go, raising an idea that has been dead politically since President George W. Bush's failed attempt to privatize Social Security in 2005.
Perry, a top-tier Republican presidential candidate, said that current recipients shouldn't worry about his reform plans. "If you're on it or approaching it," Perry said, your Social Security benefits wouldn't change. But for others, he said, "give them a private account or whatever it is."
President Bush after his reelection proposed private Social Security accounts as the centerpiece of his reform effort. The plan, tremendously unpopular, never went anywhere in Congress and contributed to the 2006 Democratic takeover of the legislature. The stock market crash of 2008 made the notion that much less appealing, as 401(k)s shriveled up while Social Security checks kept coming.
Perry made Social Security an issue earlier in the campaign by dubbing it a "Ponzi scheme" and warning young people that it wouldn't be there for them. Social Security's actuaries say the old-age and disability insurance program can pay full benefits until at least 2037, at which point the income from payroll taxes would still be sufficient to pay nearly four-fifths of benefits through 2084.
"Social Security taxes are levied on covered earnings up to a maximum level set each year. In 2010, this maximum -- or what is referred to as the taxable earnings base -- is $106,800. The taxable earnings base serves as both a cap on contributions and a cap on benefits," according to a 2010 Congressional Research Service report. "If all earnings were subject to the payroll tax, but the base was retained for benefit calculations, the Social Security Trust Funds would remain solvent for the next 75 years."