Dec 09 2004

Graham Statement on Social Security Reform

WASHINGTON – U.S. Senator Lindsey Graham (R-South Carolina) today made the following statement on Social Security reform. “President Bush is absolutely right when he says you cannot save Social Security by raising payroll taxes. “To maintain solvency by simply raising taxes, the Social Security Administration says payroll tax rates would have to increase nearly 50 percent or we’ll need $3.5 trillion new dollars – in the bank earning interest – today. It would be catastrophic to our economy to try to save Social Security by raising taxes alone. “The solution to the problem facing the system are the reforms being pushed by the President. They include optional personal investment accounts for younger workers along with other structural changes. “The President is right, current retirees or those nearing retirement age, will not be affected by any future reforms. Their benefits will be protected. “The President’s call for bipartisanship is essential as it is the only way we will save Social Security. “Those of us committed to reforming Social Security must honestly deal with the transition costs that come about when personal accounts are established. Under my plan, which has been evaluated by the Social Security Administration, we are able to achieve permanent solvency, but the transition costs are over $1 trillion. “To garner bipartisan support, I am proposing we look at a mix of options to pay for the transition costs. The goal is to use combined measures to finance the transition costs that would avoid a further dramatic increase in the deficit which inevitably comes about by borrowing the full transition costs. “I am firmly convinced many Republicans and Democrats will embrace reasonable reform if the reforms do not rely on budget gimmicks or explode the deficit. “Four things are necessary to save Social Security – presidential leadership, bipartisan support, the rejection of rigid ideology preventing workable solutions, and shared sacrifice by the American people. President Bush is the right person at the right time to help save Social Security. “Social Security is a national treasure. To allow this historic moment to pass without a permanent solution saving the system for future generations would be a national shame. #####