Campaign 2010

Sep 20, 2011

Breaking News: Paul Ryan Stands With Perry, Considers Social Security a Ponzi Scheme

Today Republican Budget Committee Chairman Paul Ryan (WI-01) stood with Republican presidential candidate Rick Perry who called Social Security a Ponzi scheme. When asked whether Social Security is a Ponzi scheme, Ryan told a conservative radio show “That is how those schemes work.” House Republican leaders including NRCC Chairman Pete Sessions and House Republican Conference Chairman Jeb Hensarling have introduced a new plan to end Social Security as we know it.

“Republican Budget Committee  Chairman Paul Ryan’s belief that Social Security works like a Ponzi scheme proves – once and for all – that House Republicans have really declared a war on seniors,” said Jesse Ferguson of the Democratic Congressional Campaign Committee. “A Ponzi scheme is Bernie Madoff ripping off Americans – not Social Security benefits that seniors earned and depend on during retirement. After Ryan led Republicans to vote for ending Medicare and Republican leaders continue to push a new plan to end Social Security as we know it, now they’re lining up behind the radical, dangerous idea that it’s nothing but a Ponzi scheme.”

Background

Paul Ryan Called Social Security a Ponzi Scheme. On September 29, 2011, Paul Ryan equated Social Security to a Ponzi scheme. When asked by conservative radio host Laura Ingraham if he agreed with Governor Rick Perry, who earlier compared Social Security to the type of investment fraud, Ryan claimed that he did. “So if you take a look at the technicality of Ponzi—I would—it’s not a criminal enterprise, but it is a pay as you go system where—you know—earlier investors, or say taxpayers, get a positive rate of return and the most recent investors, or taxpayers, get a negative rate of return,” said Ryan. “Your kids and my kids, Laura, they’re the same age   are going to get about a negative one percent on their payroll taxes if Social Security can even pay them their benefit, which it can’t. And so, it is obviously, that is how those schemes work.” [Laura Ingraham, 9/20/11]

Securities and Exchange Commission Defined a Ponzi Scheme as a Type of Investment Fraud. According to the Securities and Exchange Commission, “A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.” [Securities and Exchange Commission, accessed 9/20/11]

House Republicans Propose Social Security Opt-Out. “House Republicans on Friday introduced legislation that would allow workers to partially opt out of Social Security immediately, and fully opt out after 15 years.” The measure was introduced by NRCC Chairman Pete Sessions (TX-32) and Republican Conference Chairman Jeb Hensarling (TX-05) among others. [The Hill, 6/6/11]

Dallas Morning News: Dow's Fall Shows Peril of Changing Social Security. “The stock market fell again Friday, marking a six-week slump. That’s bad news for investors — and bad timing for Dallas Rep. Pete Sessions and others who want to transform Social Security by creating investment accounts for workers. Sessions, who runs the Republican congressional campaign effort, has been pushing as long as he’s been in the House to partly privatize Social Security. […] Indeed, after President George W. Bush’s failed push for a similar plan early in his second term, most Republicans backed away from the idea.” [Dallas Morning News, 6/12/11]


Want the latest updates? Follow the DCCC on Facebook and Twitter: