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Politics : Politics for Pros- moderated
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From: LindyBill6/20/2005 7:43:02 PM
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DeMint, Graham, and Santorum to jump start Social Security debate
Redstate

Several sources have reported that Senator DeMint is introducing a new Social Security Reform Bill tomorrow. The bill will create personal accounts with the surplus from payroll taxes and thus will not increase overall debt (as long as Congress stops raiding the Trust Fund). This proposal also limits voluntary PRAs to treasury bonds which historically return 2.5-3% a year outpacing SS but less risky than other bonds and stock options. According to John Fund, it is supported by the main Republican factions for different reasons:

The idea has the potential to unite three separate strands of thinking in the GOP. One of its Senate sponsors is Jim DeMint of South Carolina, known as a free-market purist who believes personal accounts must be the centerpiece of reform. Another is Lindsey Graham, also of South Carolina, who has proposed increasing the cap on payroll-tax payments at the same time as personal accounts are created to supplement the system. And Pennsylvania's Rick Santorum is a noted leader of social conservatives who believe retirement reform must be family-friendly. All three men agree that while their proposal is not comprehensive and doesn't preclude other ideas to shore up the system, it represents a good first step.

This strategy is shrewd and has much a better chance of succeeding than the solvency+PRAs package. The main reason is because it taps into the public distrust of the raiding of the Trust Fund. Putting the money into individual, personal "lockboxes" is an imagery that is easier to sell than the obscure debate on likely returns and so-called "guaranteed" benefits.
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