Ron Paul Fails to Lead on Social Security

Ron Paul has repeatedly declared that Social Security is unconstitutional. Apparently, that is not enough to stop him from collecting it though, as Paul revealed Wednesday that he receives social security benefits.

Here’s how Paul justified it:

Just as I use the post office, I use government highways, I use the banks, I use the federal reserve system, but that doesn’t mean you can’t work to remove this in the same way on Social Security. In the same way with Social Security, I am trying to make a transition.

Except, Paul cannot send mail without the post office. He cannot drive very far without highways. He can store his money without a bank, but it will be much less safe and lose its real value. However, he can certainly live a very full life without his social security checks.

Paul has never hidden his disdain for the program, but he also understands that simply cutting it is not an option. Older generations have paid into the system for years and expect to receive their benefits. Thus, Paul wants to wean off the mandatory system and make it voluntary:

Congress should eliminate unconstitutional spending – including unnecessary overseas commitments – and use the saved funds to help transition to a Social Security system that is completely voluntary. At some point in the near future Congress must allow taxpayers to opt out of federal payroll taxes in exchange for never receiving Social Security benefits.

The clear problem here is that allowing young workers (Paul says 25 and under) to opt out of Social Security means that there won’t be funds to pay out to those who have paid into it. Paul has promised that those who have put money into Social Security will receive their full benefits. But if the government is not collecting payroll taxes from the majority of young Americans, where is it going to get the money to pay for those benefits?

Paul’s answer has always been a bit vague. The chairman of his failed presidential campaign offered the most direct response last December:

It will require cuts elsewhere, but we can save hundreds of billions of dollars a year by bringing troops home, ending foreign welfare and overseas nation building and providing a stronger national defense here at home. If we cut and work hard, we can take care of our seniors who rely on their Medicare and Social Security.

Well, there is no way to cut hundreds of billions of dollars from foreign welfare as foreign aid is just $42.1 billion this year. As for bringing the troops home, Paul is using the same accounting gimmick that Obama used in his 2013 budget, counting $850 billion in savings from ending the wars in Iraq and Afghanistan. As Republicans pointed out in Obama’s budget, those “savings” are not real as the U.S. would have to borrow that money anyway, increasing the deficit.

If Paul wants to use that $850 billion to fund Social Security, he is going to have to borrow it to do so and if he wants it to be revenue neutral, he’s going to have to cut $850 billion from somewhere else.

And Paul also would like to cut the federal government by an additional $1 trillion in the next year. Thus, he wants to drastically cut the size of the government, allow young people to opt out of Social Security and still pay out Social Security benefits to all those who paid into the program. That means a lot of federal money is going toward Social Security.

And this doesn’t even get into the economic effects of Paul’s plan (Hint: think prolonged double-digit unemployment)

But it gets worse. Under current policy, the government will have to find more money to fund Social Security in the upcoming years, as the program is on pace to run out of money in 2035. Without much of the funding from payroll taxes, Paul’s plan will only exacerbate the problem.

Ron Paul, the man who consistently refers to Social Security as a Ponzi scheme, has the chance to stand behind his principles. He could have become an example for others who can also afford to forgo Social Security. He could have sacrificed his own rightful benefits for the cause he believes in. Instead, he collects his social security checks like everyone else while advocating a plan that would decimate the federal government as we know it.

Danny Vinik

Danny Vinik is an intern at the Washington Monthly.