As sure as the sun rises each morning and more people ease into retirement, the future of Social Security becomes a boiling issue every election.
It’s happening again in the race for Oregon’s 5th congressional district. Incumbent Democrat Kurt Schrader has claimed that Republican Scott Bruun advocates ``privatizing Social Security.’’
It happened most recently during a Sept. 10 debate at the Salem City Clubwhen Schrader said this: `` ... My opponent apparently still believes in the same old direction that George Bush had before, which is to privatize social security.’’
It’s a combustible allegation that could lead some voters to believe they would be at the mercy of an unpredictable stock market as they step into retirement. Many voters, especially older ones who rely on Social Security and who vote in high numbers, would not be pleased if they thought their cherished safety net was going to be less of a sure thing.
Schrader is just one of a big number of mostly Democratic candidates talking about Social Security and suggesting Republicans would leave seniors stranded. But is his claim accurate?
First, a little background is needed.
Social Security is a retirement and disability program guaranteed and fully funded by the U.S. government. That means if you qualify for benefits, the check will be delivered without fail each month just as it’s been since 1935 when Social Security was created by Congress.
It’s an enormously popular program that currently provides benefits to 53.4 million people. But it has a huge budget and it’s only getting more expensive as the population ages, a larger number of people qualify for benefits and fewer workers are left to shoulder the cost.
Here’s how AARP summarizes the dilemma: ``The Congressional Budget Office estimates that the reserve fund and payroll taxes will cover full payment of benefits through 2037.’’
That’s why Congress and politicians periodically float suggestions for saving Social Security. In 2005, President George W. Bush devoted a portion of his State of the Union address to a plan that would allow workers under age 55 the option of diverting up to 4 percent of their payroll taxes into personal accounts. He argued that private investing could bring better returns while easing some of the fiscal pressure on Social Security.
The proposal died as most Democrats opposed it, as did some Republicans. Critics said that unscrupulous financial advisers would charge huge fees and that the stock market’s unpredictability could strand millions of seniors without the retirement nest egg they’d counted on.
And that brings us to 2010 and Schrader vs. Bruun.
Schrader’s claim is based on comments Bruun has made over the years, including an Oct. 22, 1996, letter to the editor published in The Oregonian. ``We can address this problem by growing the economy and by slowly converting contributions into private investments, which will earn a much higher rate of return," he wrote then.
Today, he takes a bit less muscular and more nuanced view. In the section of his campaign website devoted to issues, Bruun flatly states he does ``not support a complete privatization of Social Security.’’ At the same time, he would allow workers ``the option to invest a portion’’ of their payroll taxes in private accounts. That is essentially the same idea that crashed and burned in 2006.
``I am committed to pursuing bipartisan solutions to this challenge, and I am eager to look at any proposal that will protect Social Security benefits for today’s seniors without increasing taxes. I do not support a complete privatization of Social Security for younger workers, but I do believe that option to invest a portion of their payroll taxes to conservatively managed private equity accounts should be a choice available to future recipients of Social Security benefits,’’ Bruun says on his website.
So what about Schrader’s claim that Bruun "apparently still believes in the same old direction that George Bush had before, which is to privatize Social Security"?
Bruun does seem to be suggesting an approach similar to Bush’s in that he would allow younger workers to begin investing a portion of their Social Security taxes in a series of funds monitored by the government. But that's a far cry from privatizing the entirety of Social Security, which Bruun has said he does not support.
If he follows Bush, Bruun would change nothing for workers 55 and older. They would not be able to opt into a personal account.
And for younger workers (under 55 in Bush’s plan), the possibility of creating a personal retirement account would be totally optional -- one could choose to stay in the traditional government-run system and receive benefits as promised. Bruun’s spokeswoman Alee Lockman says Bruun has not suggested a specific age limit for workers who want to contribute to private funds. He says only ``younger workers.’
It’s beyond dispute that, if he’s elected to Congress, Bruun would vote to partially privatize Social Security. But Schrader exaggerates, suggesting that Bruun wants to fully privatize the system.
That’s simply not the case and it’s the reason we rate his claim Half True.