Open Letter to Senator Santorum

Dear Senator Santorum,

Thank you for appearing on the Sunday talk shows this week. You and Senator Biden both expressed your points of view well and I appreciate the opportunity to learn more about the issues and politics you are currently working on in the nation’s capital. It was also gratifying to hear you mention Pennsylvania's interests and clarify any differences that might exist between them and the current administration’s plans.

I am writing to ask you to carefully consider the long-term impact on Pennsylvania if Social Security is treated as an investment vehicle instead of a safety net protecting the elderly from poverty in retirement. Different strategies are appropriate depending on the role we envision Social Security serving in our community.

Social Security was never intended as a means for creating prosperity. Indeed relatively simple mathematics will show that such a system would be significantly more expensive and still require a safety net like the current social security system to protect individuals who fail to prosper.

You will be told by the investment community that average returns on investments will mean that each dollar contributed today will be worth more in the long-term if it is invested by the individual rather than spent on today’s beneficiaries. That is factually correct but leaves out very important information.

First, today’s beneficiaries will still need to be covered while transitioning to the new system. That means we will pay all of the costs of today’s benefits with less revenue from the current plan or need to increase revenues from some other source.

Second, when a beneficiary stops receiving funds today (due to death) the monies are re-directed to cover the costs of other beneficiaries. Private accounts would curtail this practice and thereby further reduce revenues in the system.

Thirdly, the projections for investment returns are on the average, and based on historical models. The models are beginning to fail due to global economics and the new higher level of private investment in the market. Meanwhile, the average is only that, an average. People with small accounts may not be able to afford the average when one or two significant investment losses can seriously erode their long-term prospects. Someone with a large account can better manage the highs and lows than someone in the lower quartile. This is why in any free market system the wealthy get wealthier than the poor even when presented the same investment opportunities.

Further, I remind you that it is not the government’s job to make people wealthy. We as individuals are blessed with the freedom to start businesses, use tax sheltered 401k and 403B plans, IRA's, Roth IRA's, etc along with other investments to build wealth and non-labor incomes.

In Pennsylvania our tax dollars taken for Social Security are best spent by applying them to offering relief to seniors who's life circumstances, choices, and health leave them with less money than they require in order to live securely during their retirement.

I don’t need to remind you that Pennsylvania has the second largest population of senior citizens in the country. We are a strong state in part because manufacturing pensions and social security benefits allow our seniors to participate actively in the local economy.

The pension system is eroding quickly as more workers are given responsibility over their own retirement investments through employer sponsored 401k plans. These plans are calculated to work in part on the assumption that social security will preserve those whose investments do not fair as well as the average.

I recognize that you are in a political environment and that our commonwealth’s interests may best be served by compromising on issues in order to achieve more important points on some other matter. I submit that this issue is one where Pennsylvania cannot afford to be on the losing side of any compromise. You and Senator Specter are our best advocates in the national government and we rely on you to preserve the fiscal security of our state by aggressively pursuing the interests of our citizens. Please preserve the safety net of social security and turn back the administration’s policy of privatization.

Thank you for your continued service to our community,
Joseph Sweeney