2008 Fox News NH Republican primary debate, Jan. 6, 2008: on Social Security

Fred Thompson: Allow individual retirement accounts with government match

A: I never said that I was cutting Social Security. What I suggested with regard to Social Security is that it’s going bankrupt. The alternative with regard to Social Security is losing Social Security as we know it. So it’s a plan to save Social Security. It would do two things: allow people to set up an individual retirement account where the government would match their funds. It would save government money in the process, if you did one other thing, and that is index initial retirement benefits to inflation, instead of to wages, as they are now.

Q: If the Democrats, as they almost certainly would, block that in Congress, isn’t that whole plan pretty impractical? What do you do when the Democrats say no?

A: Well, you fight them. You take the case to the American people.

Fred Thompson: FactCheck: Slower growth of benefits for future retirees

Actually, Thompson’s proposal would not affect the annual cost of living increases for Social Security beneficiaries. Those would continue to be calculated as they are now, both for current and future beneficiaries. What Thompson’s proposal would do is slow the growth of benefits for future retirees, changing the way that the initial benefit is calculated. These benefits would grow at the rate of inflation. Currently initial benefits are pegged to the growth in wage levels, which rise faster. The result is that somebody retiring in the future would get less to start than the current formula promises. However, after that, the checks would get annual cost of living increases under the same formula that now applies.