In advance of Thursday’s debate in Orlando, the Romney for President campaign released a series of questions for Governor Rick Perry about his proposal to “let the states [decide] how to run the pensions.” Questions about Perry’s proposal to return Social Security to the states have so far gone unanswered.
“This election is about choices and voters – and voters will have the opportunity to choose between Mitt Romney, who wants to fix and strengthen Social Security for the next generation, and Rick Perry, who wants to dismantle it. Voters are now learning more about Rick Perry’s position on Social Security and find it troubling that he has refused to answer questions on what the Social Security program would look like at the state level, as Rick Perry suggests. Governor Perry has the opportunity to clarify his proposal while he is in Florida – a state with an extraordinarily high number of retirees and near retirees,” said Gail Gitcho, Romney Communications Director.
Six Questions for Rick Perry on Returning Social Security to the States
1. Constitutionality: Perry has asserted that a federally run Social Security program is unconstitutional. If this remains his position, it suggests that the program must be devolved to the states notwithstanding the advisability of such an approach. The first question in understanding Perry’s approach must be whether he believes there is no choice but to devolve or, alternatively, if he believes it is the right policy solution.
2. Unfunded Liabilities: Devolving the program to the states does not address underlying fiscal challenges. Where a single program once faced possible insolvency, there would now be fifty. How would Perry suggest a state such as Texas address this challenge? Should it raise taxes, reduce benefits, or pursue other types of reform?
3. Trust Fund Accounting: What would happen to the Trust Fund that accrued while the system was in surplus? Interest payments from the fund and draw-down on the principal are crucial funding streams for the national system that are unavailable to the states. How would those funds be equitably allocated to the states?
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4. Mobility: How would a state-by-state system accommodate the enormous number of Americans who move across state lines during their lives, and especially as retirement nears? Would each state be responsible for supporting its current disabled and elderly population on its current payroll? Would funds paid into the system in one state follow a resident to another state later in life?
5. State Obligations: Would states be free to forego a pension program altogether? If so, what if any provision would be made for the disabled and elderly in that state? Or would they be expected to move to other states with more generous benefits, inevitably overwhelming those systems?
6. Administration: Would individuals retain national Social Security numbers or would each state administer its own system? Would individuals have any guarantee that commitments made during their working life are honored in retirement? Who would pay for the added expense associated with administering fifty programs instead of one?
BTW, Romney gave specifics today on how to fix Social Security:
“There are one of two ways you can make Social Security work forever.
“One of course is to raise the retirement age by a year or two,” said Romney. “The other is having slower growth in inflating the benefits of higher-income of Social Security recipients. Again, not current recipients but those in their 20′s, 30′s, 40′s and early 50′s.
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