Stephen Laffey on Social Security Republican Senate Challenger

Adopt Personal Security System, phase out FICA

Fix Social Security-The Big lie
1. Those already collecting Social Security are grandfathered.
2. Those scheduled to collect receive all benefits accrued under the current system.
3. No additional benefit accrual. The old system is frozen.
4. The FICA tax is gradually phased out.
5. Adoption of the Personal Security System (PSS).
6. Workers contribute 10% of pay to PSS accounts.
7. Half of married couples' combined PSS contributions is allocated to each spouse's account.
8. Government makes matching contributions on behalf of low earners, the disabled, and the unemployed.
9. All PSS balances are invested identically, by a computer, not Wall Street, in a weighted index of global stocks, bonds, and other traded financial securities.
10. The Government guarantees at least a zero real (after-inflation) return. No one loses their contributions, adjusted for inflation.
11. Between 57 & 67, each birth cohort's PSS balances are used to purchase Treasury Inflation-Protected Securities (TIPS).

Freeze current system for people in it; reform for future

The system has its problems. In 2035, just 80% of benefits will be payable if Congress doesn't fix the program soon, a study found last year. Laffey wants to freeze the current Social Security system--paying the people who are still in it--and reforming it for generations to come.

'We start because can't we agree that it has to be fixed. And so, if you want to, I can tell you what it is we can talk about,' he said. He supports what's known as the Purple system by Laurence Kotlikoff, an economics professor at Boston University. Under it, everyone would put 8 percent of their pay into a personal account, with the government matching the contributions of low earners. All the contributions would be invested in a global market-weighted index of stocks and bonds and real estate.

Criticizes Bush's Social Security proposals