RE: Response to Carolyn Cox

[Michael Jones <powderfinger99@yahoo.com>]

Mr. Santorum,

<<<<
My plan does not provide for expanding the PRA wage percentage, and I 
do not believe that we should move to a fully defined contribution 
system.  I firmly believe that Social Security should always remain 
essentially a universal social insurance system to protect all of its 
current beneficiary classes:  seniors, widow(er)s, dependents and the 
disabled.  In looking at the retirement portion of Social Security 
(OASI) -- the facet of the program that has most beneficiaries and 
faces the greatest liability -- we need to remember that part of 
social insurance is to protect against having an unsuccessful 
experience in the labor market.  This is a an example of one of Social 
Security's amazing successes:  a democratic people coming together to 
provide for the common good.  I believe a social insurance system must 
always remain, albeit one that is fiscally sustainable and actuarially 
sound.
>>>>

I have found your previous statements to be quite frank and honest.
In this respect, you have shown a much deeper understanding of
the problems facing our social insurance system than many other
politicians are willing to face.

I find this rhetoric above to be a step backwards from your
previous positions. I was genuinely encouraged that we might one
day soon implement a transition to a fully funded system. 

The primary beneficiaries of the program
are workers who live to retirement age, or to their survivors.
The best means to provide benefits to these type of beneficiaries
is using a fully funded contribution system which contains
real wealth that workers own.

To protect workers from the potential loss of income from disability
or to death of a spouse requires just a small part of the total
payroll tax. Policies available in the private sector are 
relatively inexpensive which provide these benefits.

The current system does provide disability and dependent benefits
at a cost comparable to the private sector. However, I cannot
agree that the current system provides any "protection" from the
poverty of old age when the cost of this "insurance" is over
10% of lifetime payroll. Even under your plan, 8% of lifetime
payroll tax would be bucketed for retirement benefits pay-as-you-go
that provide retirement "security".

8% of lifetime payroll is too much to pay for "retirement
insurance". This is enough money to fully fund the entire
benefit if set aside in a prefunded account.

Mr. Santorum, you have taken a big step by offering up a plan
which creates worker accounts using existing payroll tax. However,
I had hoped that you would fully support a complete transition
to a fully funded system.

Michael