South Carolina Senate Fact #15: There Are No Real Assets in the “Trust Fund”

The rapidly approaching Social Security crisis is the most important domestic economic issue facing America today. Unfortunately, Inez Tenenbaum refuses to be forthright about this crisis. In fact, she actually confuses the facts by asserting that the creation of Personal Retirement Accounts (PRAs) will “drain” the Social Security Trust Fund. The truth is that there are no real assets to drain from the “Trust Fund” in the first place— the only way to truly protect the Social Security surplus is to create Social Security PRAs that workers own and control.

The Social Security Trust Fund is an accounting fiction that dwarfs the Enron accounting scandal. Congress is spending the Social Security Trust Fund surplus as you read this, and replacing your tax dollars with meaningless IOUs. When the Social Security program runs into the red in just fourteen years, America won’t be able to draw on the Trust Fund to pay benefits. If we follow Tenenbaum’s lead and do nothing, at that point, Americans will face a combination of massive tax increases and benefit cuts.

Representative Jim DeMint, on the other hand, refuses to take part in this highway robbery. In the House of Representatives, he is a leader in the effort to reform Social Security through personal accounts. PRAs contain real assets, and will grow with the economy. And just as important, PRAs will be owned and controlled by individual workers— guaranteeing that Congress can’t spend the resources.

The retirement security issue is critical. Inez Tenenbaum needs to stop her baseless attacks against PRAs and be honest about the Social Security crisis.

Tenenbaum needs to acquaint herself with the facts. She could start by looking at the Social Security web site where they specifically say, “Social Security’s financing problems…are very large and serious.” Jim DeMint has accepted this reality and presented a sound solution, PRAs.

For more information, please visit http://www.freedomworks.org/southcarolina/