Perriello: Don't privatize Social Security

U.S. Rep. Tom Perriello, D-Ivy, is denouncing a GOP plan in Congress to partially privatize Social Security that many of his eight Republican opponents support.

“How can anybody think it’s right to gamble with our seniors’ Social Security or cut their Medicare?” Perriello said in a statement Thursday afternoon. “We need new ideas, not disastrous old ideas that seniors have rightly rejected before.

“They have earned their retirement security and I will oppose any effort by Republicans to break that promise,” Perriello continued. “Our Greatest Generation deserves better than having their Social Security gambled on a risky scheme.”

Perriello’s opposition to the idea of privatization puts him at odds with several of the eight Republican challengers vying to win the GOP nomination to challenge him in the fall.

“My No. 1 concern is to see Social Security stabilized,” said Michael McPadden, a pilot from North Garden and one of the Republican contenders. “Privatization is the best way to stabilize the system.”

The Social Security system, McPadden pointed out, is on track to run out of money, thereby wiping out benefits for seniors down the road. Privatization, he said, could prevent the system from “crashing catastrophically.”

At issue is a proposal in Congress called “A Roadmap for America’s Future” by U.S. Rep. Paul Ryan of Wisconsin, the ranking Republican on the House budget committee. Ryan’s plan seeks to eliminate federal debt by reforming Medicare, Medicaid and Social Security, as well as other measures.

With regards to Social Security, which provides a share of more than 30 million seniors’ retirement incomes, Ryan’s “roadmap” would keep the status quo for Americans over the age of 55. For those under 55, it would allow them to shift a portion of their Social Security payroll tax payment into a personal retirement account, selected from a group of investment funds approved by the federal government.

Laurence Verga, a private real estate investor and a Republican running in the June 8 primary, said he likes Ryan’s plan, as it would allow a beneficiary’s retirement fund to grow more than it would with Social Security. Plus, he said, privatized Social Security accounts would allow recipients to pass along more wealth to the next generation.

“The devil’s in the details,” he said. “But we do need some privatization of Social Security.”

The current Social Security system, Verga said, is not sustainable and is in need of reform to make it last.

“I’m about to turn 47,” Verga said. “I question whether I’ll ever see [my Social Security benefits].”

Ryan’s proposal, Verga said, is an especially good strategy for partially privatizing Social Security because it would guarantee every dollar put in one of the private investment accounts.

Albemarle County Supervisor Kenneth C. Boyd, another of the GOP hopefuls, does not generally support the idea of fully privatizing Social Security but thinks Ryan’s proposal has some merit.

Boyd, who also believes that Social Security reform is needed to keep the system solvent, thinks the federal government ought to move to a system closer to the Virginia Retirement System.

VRS, which serves 600,000 current and retired public employees in Virginia, is a defined benefit plan overseen by a Board of Trustees appointed by Virginia’s governor and legislature. The board oversees an investment portfolio that aims to grow its $47 billion in assets.

“It works for companies. It works for the state and federal government. Why can’t it work for Social Security?” Boyd said.

Sen. Robert Hurt, R-Chatham, is the leading GOP candidate against Perriello, according to a poll released last week. Hurt’s campaign did not immediately respond Thursday to a question about whether Hurt supports the concept of privatizing Social Security.

Jessica Barba, Perriello’s press secretary, said the freshman Democrat opposes even the limited form of Social Security privatization in the GOP-backed proposal.

“It’s a slippery slope,” she said. “There are some things that should be held sacred and protected and Social Security is one of those things.”