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NTU Supports S. 1302, the Stop the Raid on Social Security Act of 2005
June 30, 2005
The Honorable Jim DeMint
Dear Senator DeMint:
On behalf of the 350,000 members of the National Taxpayers Union (NTU), I write to offer our support for S. 1302, the Stop the Raid on Social Security Act of 2005. This important legislation would at long last give all American workers who pay into the Social Security system ownership over personal retirement accounts and would prevent Congress from spending Social Security revenues on everything from public broadcasting to ethanol.
Simply put, for the past 20 years or so, the federal government has collected $1.67 trillion more in payroll taxes (and accumulated interest) than it has paid out in retirement benefits to senior citizens. None of this money is actually being saved for the future retirements of American workers, so every last penny has been spent. This bill would finally change that system so that as long as Social Security runs a surplus, which most experts see continuing until 2016, excess revenues (in the form of Treasury bonds) will be used to start personal retirement accounts for Americans under 55 years of age unless they opt out of those funds.
The amount of funds that Americans would receive in their personal accounts under this plan is substantial. In fact, Social Security's annual surplus is now averaging approximately $70 billion a year. That works out to $5,484 between now and 2016 that would be accumulated by a worker earning $40,000 per year. As an intermediate reform measure, the only thing needed to further bolster the worthiness of this proposal is to allow workers to benefit from the accumulation of interest payments that would be rightfully theirs. This could lead to a much larger account of approximately $16,648 for the worker mentioned above. After all, the best thing about allowing individual Americans to own their retirement accounts is that they - not the federal government - receive the financial benefits of their investments.
NTU and its members remain unwavering in their support for large, individual accounts and we remain hopeful that Congress will tackle these needed reforms in the months and years ahead. Thankfully, your innovative and wise proposal, if implemented, will be a major step in the right direction. Thus, we look forward to working closely with you to pass the Stop the Raid on Social Security Act of 2005.
Paul J. Gessing