Mitt Romney Has Consistently Supported The Privatization Of Social Security

Original Link: http://thinkprogress.org/economy/2011/09/08/314777/flashback-mitt-romney-has-consistently-supported-the-privatization-of-social-security/

By Travis Waldron

Former Massachusetts Gov. Mitt Romney (R) set aside his front-running strategy at last night’s Republican presidential debate, attacking the race’s new front-runner, Texas Gov. Rick Perry, on a variety of issues, including Perry’s repeated assertions that Social Security is a “Ponzi scheme” that won’t exist for younger Americans. In his 2009 book, Perry also questioned the constitutionality of Social Security, another issue with which Romney’s campaign took exception.

After the debate, Romney campaign adviser Stuart Stevens told reporters that Perry’s desire to “abolish Social Security” was a “disqualifying position.” But in 2007, when Romney was also campaigning for the Republican nomination for president, he supported his own radical change, repeatedly advocating for the privatization of Social Security, a plan pushed by Republicans and former President George W. Bush that failed in 2005.

At one debate, Romney was asked where he stood on privatization. Regarding Bush’s plan, Romney said, “That works“:

ROMNEY: Currently, we’re taking more money into Social Security that we actually send out. So our current seniors, their benefits are not going to change. For people 20 and 30 and 40 years old, we have four major options, for instance, for Social Security. One is the one Democrats want: raise taxes. It’s the wrong way to go.

Number two, the president said let’s have private accounts and take that surplus money that’s being gathered now in Social Security and put that into private accounts. That works.

But Romney’s support of private accounts was hardly a one-time utterance at a single debate. Throughout that campaign, he touted the plan:

June 2007: When a college student asked Romney how he, as president, planned to solidify Social Security’s future, he endorsed private accounts: “One thing that the president proposed [on Social Security] that is a good idea is to take some of that money, or all of that surplus money and allow people to have a personal account. So they can invest in things that have a higher rate of return than just government debt. They can invest in things like our stock market or the world’s stock market…so that they can get a better return, and maybe that would make up for some of the shortfall. That’s a good idea.”

October 2007: At a town hall, Romney said there were “two major paths” lawmakers could take to shore up Social Security. The first, he said, was “to raise taxes on people, which I don’t want to do. And the other is to allow some portion of people’s money that they’re now having taken out of their salaries to be invested in Social Security.” When an attendee told him his plan was “privatization,” Romney replied, “You call it privatization. I call it a private account.”

Romney did not abandon his support for privatization when his first presidential campaign ended. On page 160 of his book, No Apology, published in 2010, Romney again hinted at support for privatization:

“Individual retirement accounts offer a fourth option, one that would allow today’s wage earners to direct a portion of their Social Security tax to a private account rather than go entirely to pay the benefits of current retirees, as is the case today. [...] Owners of these individual accounts would invest in a combination of stocks and bonds and – presuming these investments paid a higher rate of return than new treasuries – the return on these investments would boost the payments to seniors. I also like the fact the individual retirement accounts would encourage more Americans to invest in the private sector that powers our economy.”

What is shocking about Romney’s embrace of private accounts in his book is that it was published after a financial crisis that would have devastated retirement accounts for millions of Americans had the push for privatization succeeded. According to a Center for American Progress analysis, an October 2008 retiree would have lost $26,000 in a private Social Security account, and that report was done before the market bottomed out in 2009. Millions of Americans who already save in some sort of private account — a 401(k), for instance — lost nearly everything in the crisis, and Social Security is the only source of retirement income they have left. Yet Romney still offered privatization as a potential “fix” for the program, acknowledging but ignoring the easiest way to make Social Security solvent for the next 75 years.

Perry’s position that Social Security is unconstitutional is without a doubt, as veteran GOP strategist Karl Rove put it, “toxic.” But the argument Romney’s campaign has pushed is that by taking a position Americans don’t support, Perry is unelectable and incapable of beating President Obama in a general election. That stance, however, ignores Romney’s own support for a radical position that has been repeatedly proposed by Republicans and subsequently rejected by the American people.