Sep 27, 2011
Multi-Millionaire Congressman Michael McCaul says Social Security is a Ponzi Scheme
Republican Congressman Michael McCaul (TX-10) has made his position against Social Security quite clear and yesterday joined Governor Rick Perry in calling Social Security a Ponzi scheme. Congressman McCaul, who is currently the richest member of Congress, plainly said of Social Security, “to some extent, it is a Ponzi scheme.” In addition, Republican Budget Chairman Paul Ryan (WI-01) has agreed saying “That is how those schemes work.” And House Republican leaders, including Texas Republicans NRCC Chairman Pete Sessions and House Republican Conference Chairman Jeb Hensarling, have introduced a new plan to end Social Security as we know it.
“Congressman McCaul’s belief that Social Security works like a Ponzi scheme proves – once and for all – that House Republicans have declared war on seniors,” said Amber Moon, Western Regional Press Secretary. “A Ponzi scheme is Bernie Madoff ripping off Americans – not Social Security benefits that Texas seniors earned and depend on during retirement. Multi-millionaire Michael McCaul is out of touch with seniors and middle class Texans who depend on Social Security to make ends meet.”
Background
McCaul Agreed with Perry that Social Security was a Ponzi Scheme. In 2011, McCaul agreed with Perry that Social Security was a Ponzi scheme. “To some extent, it is a Ponzi scheme,” said McCaul. [Politico, 9/26/11]
McCaul Listed as Richest Member of 112th Congress. In 2011, Roll Call reported that McCaul was the richest member of the 112th Congress. McCaul’s net worth was $294.21 million, yet in 2005 he reported a minimum net worth of about $12 million. “His financial disclosure report now depicts a fortune worth almost 25 times that amount, making him the wealthiest Member of Congress, at least on paper.” [Roll Call, 9/12/11]
Paul Ryan Called Social Security a Ponzi Scheme. On September 20, 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 and 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, 6/11/11]
###
Want the latest updates? Follow the DCCC on Facebook and Twitter:
