Sen. DeMint, Rep. Shadegg Tout ’Stop the Raid, Start the Accounts’ Social Security Plan at Luncheon; Now is the Time to Move on Social Security Reform

WASHINGTON, July 18 -- At a luncheon hosted by the Institute for Policy Innovation (IPI) and the Free Enterprise Fund (FEF), Senator Jim DeMint and Representative John Shadegg touted the most recent Social Security reform proposal, commonly called “Stop the Raid, Start the Accounts.” The plan stops the federal government from stealing and spending Social Security’s surplus, and instead uses the surplus to fund personal accounts. The first published analysis of this proposal was also released at the luncheon.

Sen. DeMint described this new reform plan as “creat(ing) this idea of solvency by funding personal accounts in an aggressive way.” He further emphasized that time is of the essence if reform is going to take place. “(Social Security reform) isn’t going to happen if it doesn’t happen this year.”

He continued, “We need to push the House...to move a bill in July...then we will have some political pressure to make this happen.”

When asked about the House’s Social Security plans, Rep. Shadegg stated, “I think I should be the policy chairman and Denny (Hastert) and Tom (DeLay) should be the Speaker and the Majority Leader.” Shadegg had earlier admitted, however, that “Mr. Thomas has a number of aggressive ideas for doing other things to enhance retirement planning. Whether or not this bill will be rolled into that type of legislation which does other things to enhance retirement planning, I don’t know, though I have heard that speculation.”

IPI released the first published policy analysis of the reform plan during the luncheon. The publication, entitled “Stop the Raid, Start the Accounts,” reveals that the total Social Security trust fund surplus would immediately fund 3.2 percent personal retirement accounts, stopping the spending raid on the trust fund and starting the personal accounts so broadly supported by the public.

According to study authors Dr. Lawrence Hunter and Peter Ferrara, “This would begin to solve Social Security’s unfunded liability problem while leaving the door open to a future extension of the accounts or other steps necessary for a comprehensive solution.”

Hunter was the first to recommend the proposal during congressional testimony in May of 2005 when he discussed the merits of expanding personal accounts to include interest due the trust fund.

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Hunter is an IPI Senior Research Fellow and FEF Vice President. Ferrara is a Senior Research Fellow at both IPI and FEF. For copies of the new IPI report visit http://www.ipi.org or contact Sonia Blumstein at soniab@ipi.org or 703-912-5742. The authors are available for interview.

IPI is a public policy organization.

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