The Republican Party gets a lot of criticism over the issue of Social Security. Many will state that Republicans are against Social Security as a whole. This is untrue. Republicans are against Social Security in the form that it currently exists. While Social Security does represent ideas, such as government spending and redistribution of wealth, which the Party is generally against, very few Republicans will argue that Social Security should be done away with. Instead, they believe in large reforms to the system. They believe that workers need to be given greater control over their own retirement investments. In light of lengthening lifespans, Republicans believe that Americans need greater freedom to arrange personal retirement investments as a supplement to Social Security. They believe young Americans especially should be given this opportunity, as many members of the younger generations do not believe in the effectiveness of the Social Security system, and their money should not have to go into a system they do not support and/or believe in when they have many other options available to them.
- Choices for Workers
- Democrats Vs. Republicans on Social Security
- George W. Bush on Social Security
- Mitt Romney on Social Security
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In terms of Social Security reform, the Republican Party supports limitations to the system that will reduce both government spending and citizen dependency. They believe that the system is highly outdated, and is in need of a complete overhaul. Republicans see Democratic propositions to overhaul Social Security as stopgaps that are simply delaying the system’s failure, rather than preventing it entirely, and instead propose efforts that will rectify the issues within the Social Security system entirely.
Social Security is not equipped to handle the current average life expectancy of Americans. Therefore, the younger generations should be provided with the option to create their own personal investment accounts, which would supplement the Social Security system. The goal of any reforms of Social Security should be to give it a sound fiscal basis that will give workers control over their investments, as well as a sound return on their investments. The current system is running the risk of becoming incapable of paying out to those who paid into it for the duration of their lives. Republicans believe that the sooner we act the better, as this will not only give those closer to retirement reassurance that they will see their benefits, but will also give younger workers more time to plan their own retirement within the new system. Republicans stress that the reforms they seek should not include tax increases, and should not affect anyone currently receiving Social Security, or close to receiving Social Security. They wish to see today’s workers free to direct a portion of their payroll taxes to personal retirement investments rather than to Social Security. This would, however, be a voluntary option, so workers could opt to stay with the current system if they so wished. This would allow every American to invest in their retirement in a way that they see fit and believe in.
One large disagreement between parties on the issue of Social Security is how much of a forefront issue they believe Social Security is. A recent survey by Allianz Life showed that, when asked what they believe the most important economic issues facing America are, 65 percent of Democrats listed Social Security, while only 42 percent of Republicans did. In terms of contributing to the federal debt, more Republicans (38 percent) than Democrats (15 percent) named Social Security. Republicans also show a tendency to start preparing financially for retirement earlier in life than Democrats do. 79 percent of Republicans reported beginning to save before their 50s, with 69 percent of Democrats reporting beginning to save at the same time.
A majority of Republicans believe (56 percent as of 2012, according to a Welles Fargo and Harris survey) that the responsibility for retirement finances rests with the individual. Only 42 percent of Democrats reported the same belief. Most Democrats believed that the government and employers should play a role in retirement funding. In terms of whether or not employers should counsel their employees on managing their retirement savings, far more Democrats (86 percent) say yes than Republicans (only 67 percent). Far more Democrats (77 percent) than Republicans (55 percent) also believe that 401(k) plans should automatically enroll employees. Likewise, 72 percent of Democrats and 56 percent of Republicans believe that 401(k) plans should automatically increase employee’s contributions to their plan by 1 percent each year. The statistics above make it clear that Republicans generally believe in the individual being responsible for their own retirement funding; a cause that is thoroughly aligned with the Party’s proposal to allow independent investment in retirement, outside of Social Security. With these fundamental differences at the base of the issue, it is easy to see where the two parties would easily disagree on the reforms that need to be made.
In terms of reform, a majority of American (56 percent) believe that preventing future cuts to the Social Security program is more important than avoiding increases in Social Security taxes to workers and employers. However, in terms of political parties, 67 percent of Democrats prioritize avoiding benefit cuts, while only 49 percent of Republicans believe this should be the #1 priority in Social Security reform. Within the Republican Party, it has been shown that lower-income Republicans feel that preserving benefits is far more important than higher-income Republicans seem to. Higher-income Republicans tend to believe that it is more important to focus on steps to reduce the budget deficit than it is to preserve entitlements such as social security. Democratic beliefs on Social Security are not divided by income.
In recent budget negotiations, Republicans sought Social Security cuts as a means to reduce government spending. Instead, the President’s proposal includes tax increases to cover the monetary gap. Brendan Buck, a spokesman for House Speaker John Boehner, stated that the President’s refusal to seek these cuts a reaffirmation of “what has become all too apparent: the president has no interest in doing anything, even modest, to address our looming debt crisis. The one and only idea the president has to offer is even more job-destroying tax hikes, and that non-starter won’t do anything to save the entitlement programs that are critical to so many Americans. With three years left in office, it seems the president is already throwing in the towel.”
Many in support of the President’s budget proposed seeking cuts in the medical care sector instead, as medical spending has now exceeded Social Security as a cost to the government. This is a tactic that has been used by Republicans in budget cuts in the past. In both the 2012 and 2013 budget proposals, both heavily drafted by Republican Paul Ryan, Social Security was left untouched. Instead, Ryan proposed heavy reforms to both Medicare and Medicaid.
As the last Republican president, Bush was obviously the last Republican in the White House to push for Social Security reform. His plans and ideas to reform the system met the general consensus of his party, and would not have affected those collecting or near collecting Social Security. He proposed, like many other Republicans, voluntary personal investment accounts. These accounts would be phased in over three years, in the first year, the oldest Americans could open accounts. The second year would bring in the next age range, with the third year anybody could opt for an account. These accounts could be used to divert up to one third of payroll taxes into retirement investments outside of Social Security. However, annual contributions would be capped at $1,000 the first year of the plan, and the cap would rise approximately $100/year after that. Bush stated that the gradual implementation of this plan would severely limit the shortfall of funds to current retirees. The remaining shortfall would have been made up for by borrowed funds. As for how the funds would work, Bush stated, “We will make sure there are good options to protect your investments from sudden market swings on the eve of your retirement.” In terms of other ways to reform Social Security, President Bush refused to increase payroll tax. He said that, “fixing Social Security permanently will require an open, candid review of the options. … I will work with members of Congress to find the most effective combination of reforms,” and considered plans such as limiting benefits for the wealthy, indexing benefits to prices rather than wages, increasing the retirement age, and discouraging taking Social Security benefits early were on the table.
Mitt Romney sees a need to reform Social Security in order to make it functional long-term. He supports price indexing that is tied to a lower inflation growth model, as well as reducing Social Security benefits for top bracket earners. In terms of what his plans would be for the system, he stated “Now, my own view is, that we have to make it very, very clear that Social Security is a responsibility of the federal government, not the state governments, that we’re going to have one plan, and we’re going to make sure that it’s fiscally sound and stable. And I’m absolutely committed to keeping Social Security working. I put in my book that I wrote a couple of years ago a plan for how we can do that and to make sure Social Security stable not just for the next 25 years, but for the next 75.”
Mitt Romney is a strong supporter of the idea to partially privatize Social Security, by giving individual workers the choice to divert part of their benefits into a private account. During his campaign for President, Romney said “One thing that President Bush proposed, and it’s a good idea, is to take some of that money, or all of that surplus money and allow people to have a personal account, so they can invest in things that have a higher rate of return than just government debt. They can invest in things like our stock market or the world’s stock market…so that they can get a better return, and maybe that would make up for some of the shortfall. That’s a good idea.”
Romney also believes Americans should consider gradually raising the retirement age as the life expectancy rises. He does believe in causing no reduction of benefits to those who are currently receiving Social Security or those close to receiving Social Security with any reforms to the system. He is against the suggestion to raise the payroll tax. In fact, he included this as an “option that should not be on the table” in his Jobs and Economic Growth Plan.
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