Saturday, December 27, 2014

Toomey: Privatize Social Security? Who, me?

Debate over the future of Social Security, and the meaning of "privatization" divides candidates in PA Senate race.

Toomey: Privatize Social Security? Who, me?


   In Pennsylvania’s Senate race, there is a sharp debate over the meaning of the neo-verb “privatize” and its gerund, as Democrats slam Republican nominee Pat Toomey for his advocacy of allowing people to invest a portion of their Social Security payroll taxes in the stock market.

  “I’ve never said I favor privatizing Social Security,” Toomey said Monday in response to a question at the Press Club of Pennsylvania in Harrisburg. “It’s an intentionally misleading term,” he added.

    Except that for a decade or more Toomey has spoken of reforming the entitlement  program by allowing younger workers to invest part of their payroll taxes and thus “own” their savings in a personal retirement account. The idea has its own chapter in his book, The Road to Prosperity, and Toomey was a leading advocate of former President George W. Bush’s 2005 plan for personal accounts.

     Rep. Joe Sestak, the Democratic candidate, said that Toomey is the one who’s being intentionally misleading.

    “If there’s ever a time to be out there and being straight with the voters as to where you stand on an issue, it’s now,” Sestak said in an interview Wednesday after a campaign stop in the Tioga section of Philadelphia. “They want accountability for your positions and I think more than anything that’s what’s needed.”

     But what Toomey is talking about, strictly speaking, is not privatization at all, spokeswoman Nachama Soloveichik said. In his plan, younger workers would be given the option of putting some of their social-security taxes in a personal account. It would be voluntary, and Toomey has said those who are retired or near retirement should get the benefits they’re entitled too under the current system.

     “That is not privatizing,” Soloveichik said. “When you privatize something you take the government out of it – but the government would still be running social security and regulating the personal accounts.”

      Sestak said that, had Social Security funds been in the market during the current crash, “you’d have 20 million more seniors who would have fallen into poverty.” He believes that allowing the Bush-era tax cuts for the top 2 percent of wage earners – those making $250,000 or more – would take care of the program’s long-term solvency challenge.

      Don’t expect the issue to go away. Democrats in races around the nation are raising the specter that Republicans will destroy the venerable Social Security program in the Wall Street casino. It has been a potent wedge issue for years for the Democrats.

     The hook: Republican Rep. Paul Ryan of Wisconsin, the party’s ranking member of the House Budget Committee, has proposed an alternative budget “roadmap” that includes allowing workers under 55 the option of private accounts for up to a third of their payroll taxes.

About this blog

Commonwealth Confidential gives you regularly updated coverage of the state legislature, the governor and the workings of the state bureaucracy. It is written by Angela Couloumbis and Amy Worden in the Inquirer's Harrisburg bureau, based right in the statehouse, and by the newspaper's far-flung campaign reporters.



Commonwealth Confidential team
Also on Philly.com
Stay Connected