Perry Revives Social Security 'Ponzi Scheme' Rhetoric Back before Texas Gov. Rick Perry threw his hat in the presidential ring, he referred to Social Security as a "Ponzi scheme." His campaign had tried to distance the new candidate from that language, but last weekend Perry himself waded right back in.
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Perry Revives Social Security 'Ponzi Scheme' Rhetoric

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Perry Revives Social Security 'Ponzi Scheme' Rhetoric

Perry Revives Social Security 'Ponzi Scheme' Rhetoric

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Now, before making his speech to veterans in San Antonio, Rick Perry startled some observers with a new assessment of America's retirement program. He called Social Security a Ponzi scheme. Governor Perry suggested young people would never benefit from the federal retirement system they're paying into.

NPR's Scott Horsley has more.

SCOTT HORSLEY: When Rick Perry was asked about Social Security during a campaign stop in Ottumwa, Iowa this weekend, he didn't mince words. He suggested younger workers who are required to pay into the retirement system are the victims of a government swindle.

Governor RICK PERRY (Republican, Texas): We need to have a conversation with America, just like we're having right here today, and admit that it is a Ponzi scheme for these young people. It is I mean the idea that they're working and paying into Social Security today, that they're going to - the current program, that it's going to be there for them, is a lie.

HORSLEY: Perry used similar Ponzi scheme language to describe Social Security in the book he wrote last year, titled "Fed Up." A campaign spokesman tried to soft-pedal that view in an interview with the Wall Street Journal earlier this month, noting the book was written before Perry decided to run for president, and saying it doesn't reflect the governor's current views. Perry himself made no such distinction at a weekend appearance in Des Moines.

Mr. PERRY: I haven't backed off anything in my book. So read the book again and get it right.

HORSLEY: Social Security does share one important feature of a Ponzi scheme. The money that today's workers pay into the system goes right back out the door to pay current retirees. That hasn't been a problem so far, but the future presents a challenge. Retirees tend to live longer now than they did in the 1930s. And as Democratic Senator Mark Warner told CBS, there are now fewer workers paying into the system for each retiree.

Senator MARK WARNER (Democrat, Virginia): Part of this is just math: 16 workers for every one retiree 50 years ago, three workers for every retiree now.

HORSLEY: Warner is part of a bipartisan group of senators known as the Gang of Six, who proposed adjustments to Social Security's tax and benefit formula in an effort to shore up its long-term finances. Perry suggested similar tweaks during this weekend's appearance in Iowa.

Mr. PERRY: We need to decide, you know, are we going to raise the age of eligibility? What's that age going to be that we're going to make the transformation from? And literally have this good, thoughtful conversation about the program and what we really want that program to be.

HORSLEY: In his book, however, Perry hints at more radical changes, suggesting that Social Security is unconstitutional, and arguing that Americans would be better off with private pensions. He acknowledged that's a politically risky position, but maybe not so risky as it once was.

University of South Florida political analyst Susan McManus notes even in her home state, nearly half the voters are now under 50, and many of them don't believe they'll be getting Social Security.

Ms. SUSAN MCMANUS (University of South Florida): It used to be in Florida, you didn't dare come in here and say anything negative about Social Security or Medicare. Now, of course, with the changing age demographic, it seems like politicians are willing to say something about Social Security's possible problems down the way may just get the attention of some of these younger voters.

HORSLEY: But defenders of Social Security say fears about the program's long-range finances are exaggerated. Eric Kingston is co-chairman of the Strengthen Social Security Campaign.

Mr. ERIC KINGSTON (Strengthen Social Security Campaign) The reason younger Americans do not believe it will be there is that there's been a drumbeat of people like Governor Perry and others who've been saying for many years the system doesn't work, it's not going to be there. The fact is, Social Security is quite sustainable. It requires very modest adjustments.

HORSLEY: Indeed, the latest trustees' report says that even if no changes were made, Social Security could keep paying all of its bills for the next 25 years, and most of them even after that. Kingston suspects Perry's real aim is to dismantle the program.

Mr. KINGSTON: I think Governor Perry has never seen a federal program that he really likes very much. He basically believes in a very small government. He believes in states' rights. He's very clear about that. That's a position that should be discussed, but it should be discussed without making specious analogies like Ponzi scheme.

HORSLEY: It seems that national conversation Perry said he wanted on Social Security is already underway.

Scott Horsley, NPR News, Washington.

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