Beyond Gore’s lockbox: What are Romney’s ideas for Social Security?

Chris Moody
Political Reporter
The Ticket

Former Massachusetts Gov. Mitt Romney has spent much of his time at the most recent presidential debates hitting Texas Gov. Rick Perry for his rhetoric on Social Security, especially Perry's proposal for a conversation about how the 50 states might do a better job of running the federal retirement program on their own.

But, in the debates at least, Romney has not discussed his own proposals for altering the system. Instead, he has seemed to adopt Al Gore's rhetoric during his failed 2000 presidential campaign. Like Gore did 11 years ago, Romney has insisted that Congress stop spending money raised by payroll taxes (and therefore dedicated to the Social Security "trust fund") on other government programs. Unlike Gore, Romney has not used the term "lockbox," a word that spawned several Saturday Night Live parodies. But Romney is making the same point.

"We all agree and have for years that the funding program of Social Security is not working, and Congress has been raiding the dollars from Social Security to pay for annual government expenditures," Romney said at the Republican debate in Simi Valley, Calif. earlier this month.  "That's wrong."

At last week's CNN/Tea Party Express debate in Tampa, Fla., Romney alluded to the lockbox again, saying that Congress is "criminal" and "wrong" for "taking money out of the Social Security trust fund."

At both debates, Romney said Social Security needed to be "saved," but he didn't mention how.

You wouldn't know it from watching the debates over the past few weeks, but through his past writings, speeches and public appearances, Romney has indicated his support for several broad proposals to change the program for younger workers. But he has not formulated a concrete plan for how he would prefer to put the changes into effect.

In his book, No Apology: The Case for American Greatness, Romney discussed three possible reforms to the Social Security system for younger workers:

1. Raise the retirement age.

"[W]e could gradually increase the retirement age. This does have a certain logic to it: The average American's life expectancy has risen by more than ten years since Social Security was created," Romney wrote. "Increasing the retirement age by even one or two years would help get the system closer to sustainability." He added,  "Sixty is the new fifty."

2. Allow for private accounts, but make them a voluntary addition that doesn't replace Social Security.

Romney discussed a plan to "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. The federal government would make up for its lost Social Security revenue by borrowing that amount through the sale of treasuries, just as it currently does for the rest of its deficits."

Later in the book, Romney went on to say: "The 2008 stock market collapse is proof, however, that we can't always count on positive returns from those investments. But it is not, as some critics claim, proof of the folly and danger of individual accounts. ...Given the volatility of investment values that we have just experience, I would prefer that individual accounts were added to Social Security, not diverted from it, and that they were voluntary."

3. Measure Social Security for high-income Americans by the Consumer Price Index instead of the Wage Index.

Romney writes that he is "intrigued" by a plan put forward by the financial executive Bob Pozen that would change the way the government calculates Social Security benefits for high-income Americans.

"Because wages have gone up a good deal faster than consumer prices, the wage index raises the starting point for Social Security benefits faster than would have been the case had the C.P.I. been used," Romney writes. "The rationale for using the wage index was that people who rely on Social Security for most or all of their retirement need it to keep up with their current wages, not a lower figured based on the change in the cost of goods. The Pozen Plan proposes to continue to use the wage index as the inflator for low and middle-income citizens, but he now applies the C.P.I. index to compute the initial benefits for higher-income individuals who are not living predominantly on Social Security benefits."

Romney would give younger workers a choice: "If they wanted the higher wage index to be used to determine their initial benefit, they they would be charged a higher Social Security tax. If they preferred the C.P.I. method, their tax would remain the same."

The two-time presidential candidate could get a chance to expand on these ideas this week: The next Republican presidential debate is scheduled for Thursday in Orlando, Fla., at 9 p.m. local time.