The Honorable Pete Sessions
2233 Rayburn House Office Building
United States House of Representatives
Washington, DC 20515
Dear Representative Sessions:
In a recent article, you described your new proposal allowing people to opt out of Social Security and put their payroll deductions into individual accounts as, "… an attempt to guarantee that those contributing to the program would have something to take out when it is time to retire."
Under current law, people are already guaranteed that something will be there to take out when they retire. The Social Security trustees’ projections show that Social Security will maintain full solvency through the year 2036. Even if Congress never makes any changes to the program, Social Security will be able to pay close to 80 percent of scheduled benefits from then on, which would be more than current beneficiaries receive.
On the other hand, if retirees were to put their money into private accounts, there would be no guarantee (unless the government provided it) of what they would get in retirement. Also, your proposal would likely raise the cost of administering such a program at least ten-fold since the administrative costs of private systems are far higher than for Social Security.
As a member of Congress, I hope that you will be careful to present the situation more accurately in future public statements. If you would like any additional background on the program or the Social Security projections, I would be happy to assist you.