Mitt Romney on Social Security Former Republican Governor (MA); presidential nominee-apparent

Bipartisan effort with Mitt Romney to shore up entitlements

"It's irresponsible for Congress to keep ignoring a preventable crisis," Romney said. "We must put in place a responsible process now to prevent dramatic cuts to programs like Social Security and Medicare or be forced to enact massive tax hikes down the road, both of which would be devastating to middle class Americans."

Version 2.0: Lower benefit rate for wealthy

ROMNEY: For the people who are already retired or 55 years of age and older, nothing changes. With Social Security--if you will, the 2.0 version for the next generations coming up-- I'd lower the rate of inflation growth in the benefits received by higher-income recipients and keep the rate as it is now for lower income recipients. And I'd also add a year or two to the retirement age under Social Security. With regards to Medicare, again, for higher-income recipients, lower benefit, a premium support program which allows people to buy either current standard Medicare or a private plan.

1-year payroll tax cut is a band-aid; make permanent changes

A: No one likes to see tax increases, but the right course for America is not to keep spending money on stimulus bills, but instead to make permanent changes t the tax code. If you give a temporary change to the payroll tax and you say, "we're going to extend this for a year or two," employers don't hire people for a year or two. They make an investment in a person that goes over a long period of time. If you want to get this economy going again, you have to have people who understand how employers think, what it takes to create jobs. It takes more than just a temporary shift in a tax stimulus. It needs instead fundamental restructuring of our economy to make sure that we are the most attractive place in the world for investment.

Q: So you would be OK with seeing the payroll tax cuts gone?

A: I don't like little Band-Aids. I want to fundamentally restructure America's foundation economically.

System is federal responsibility, not state governments

PERRY: It's not the first time that Mitt has been wrong. In Massachusetts, Romney's home state, almost 96% of the state people ar off of the Social Security program.

ROMNEY: Well, it's different than what the governor put in his book just six months ago. There's a Rick Perry out there that is saying that the federal government shouldn't be in the pension business, that it's unconstitutional, and it should be returned to the states. Now, my own view is, that we have to make it very, very clear that Social Security is a responsibility of the federal government, not the state governments, that we're going to have one plan, and we're going to make sure that it's fiscally sound and stable. And I'm absolutely committed to keeping Social Security working. I put in my book a plan for how we can do that and to make sure Social Security stable for the next 75 yearws.

Congress taking money from Trust Fund is criminal

ROMNEY: Governor Perry, you've got to quote me correctly. You said it's criminal [as a Ponzi scheme]. What I said was congress taking money out of the Social Security trust fund is like criminal and that is and it's wrong.

Keep Social Security as an essential federal program

ROMNEY: No, what I'm saying is that [his use of] the term "Ponzi scheme" is over the top and unnecessary and frightful to many people. the view that somehow Social Security has been forced on us over the past 70 years that by any measure, again quoting his book, by any measure Social Security has been a failure, this is after 70 years of tens of millions of people relying on Social Security, that's a very different matter. the financing of Social Security, we've all talked about at great length. I put in my book a series of proposals on how to get it on sound financial footing so that our kids can count on it, not just our current seniors. I think that Social Security is an essential program and we should change the way we're funding it.

Funding for Social Security is not working, but system works

ROMNEY: Well, the issue is not the funding of Social Security. We all agree that the funding program of Social Security is not working, and Congress has been raiding the dollars from Social Security to pay for annual government expenditures. That's wrong. The funding, however, is not the issue. [To Perry]: The issue in the book "Fed Up," Governor, is you say that by any measure, Social Security is a failure. You can't say that to tens of millions of Americans who live on Social Security and those who have lived on it. The governor says look, states ought to be able to opt out of Social Security. Our nominee has to be someone who isn't committed to abolishing Social Security, but who is committed to saving Social Security. Under no circumstances would I ever say by any measure it's a failure. It is working for millions of Americans, and I'll keep it working for millions of Americans. And we've got to do that as a party.

So-called "Trust Fund" has defrauded American people

To put it in a nutshell, the American people have been effectively defrauded out of their Social Security. In 1982, the government raised Social Security taxes with the intention of creating a surplus that could be set aside in some fashion for the baby boomers when they retired. But for the last thirty years, the surplus has been spent, not on retirement security, but on regular budget items.

Add individual retirement accounts as option

Rein in the excessive growth in entitlement programs

Will try to fix Social Security without raising taxes

A: I'm not going to raise taxes. Not only are you taking money away from their pocketbooks, you're also slowing down the economy. You slow down the economy, more people lose work. More people lose work, of course, you're having a lot of folks that really have their lives turned upside down. So, raising taxes is just something you don't want to do. We're going to have to sit down with the Democrats and say, let's have a compromise on these three elements that could get us to bring Social Security into economic balance. You can have personal accounts where people can invest in something that does better than government bonds--with some portion of their Social Security. We're going to have the initial benefit calculations for wealthier Americans calculated based on the Consumer Price Index rather than the wage index. That saves almost two-thirds of the shortfall. You can change the retirement age. You can push it out a little bit.

No FICA for workers over age 65, so they can stay working

And by virtue of that elimination, you're going to have more people stay in the workforce. That's going to help grow our economy. They're not going to be paying any Social Security or Medicare taxes anymore, no more payroll taxes.

Favors private accounts; prepared to be entirely bold

Private accounts work better than extending retirement age

1. The one Democrats want: raise taxes. It's the wrong way to go.
2. The president said let's have private accounts and take that surplus money that's being gathered now in Social Security and put that into private accounts. That works.
3. Other people said, well, extend the retirement age. That mathematically works. It's not as attractive.
4. And the last is to index the Social Security benefits, the first benefit, to something other than wages, which is what it has always been. But, in my view, that's the wrong way to go, other than for higher-income Americans. Let's consider indexing based on prices rather than wages.

Reform entitlements by negotiating behind closed doors

Honor expectations of recipients, but take action for future