In contrast to other public meetings U.S. Rep. Tom Davis (R-11) participated in recently, Social Security was just one of many issues discussed at a town hall meeting in Vienna.
The crowd filled the Town Council chamber on Saturday, March 5, and spilled out into the hallway. Davis explained what he sees as a problem with the Social Security program as it is currently structured, and what might be done to fix it. The current system, he explained, uses funds from current workers to pay for benefits of current retirees. That system has created a surplus each year, and that surplus has generally been used to pay down other debts.
The fund is repaid with treasury bills, which Davis described as "IOUs." In 2018, the surpluses will end. "That year, the IOUs come due," Davis said. As those IOUs are paid, more of the budget will need to be used to pay for them. "Pretty quickly, this starts eating up a major part of the budget," Davis said.
By 2042 or 2052, depending on the calculations, the IOUs run out. At that point, either benefits must be cut or the payroll tax will have to be increased. Currently, the payroll tax of 12.4 percent is split between the employer and worker, which supports the system.
Keith Crane of Annandale brought up the other piece of the puzzle, private accounts. "Private accounts are not a conservative idea, and they’re a bad idea," Crane said. "We do not need another government program."
Davis generally agreed. He continued to express his skepticism of the idea. Since current workers pay for current retirees, if the workers start paying into another system, how will the government fund the transition if workers stop paying in? "The real question for me is how do you get from here to there?" he said.
Davis tossed out many ideas to the crowd, which were each greeted with varying degrees of acceptance. He discussed creating private accounts as an add-on to the current program but ruled out raising the tax rate. Currently, Social Security taxes are only paid on the first $90,000 of income. Davis was not in favor of raising the $90,000 cap, noting the large number of his constituents that would be affected. He suggested an idea one congressman has proposed of leaving the cap at $90,000, and then starting it again at $300,000.
Another option, which Davis said he is open to, is raising the retirement age. "Just make sure you tell them [retirees] in time," Davis said. "You can save more money doing that than any of the other things."
Several people brought up the federal tax cuts, saying the amount of money the government would have if they had not been implemented would be able to help cover gaps in Social Security benefits.
Davis again stated his support for the tax cuts. "Tax cuts have a dynamic effect over time," Davis said. However, he does think that there have been enough cuts. "I think, at this point, you don’t have to do any more tax cutting."
HOMELAND SECURITY and the War in Iraq were the other major issues discussed. Sue Swift of the Vienna/Dunn Loring area came to speak against the Patriot Act. "[President George W.] Bush [R] said he wants to spread democracy abroad, but democracy is being curtailed here at home," Swift said.
Davis reiterated his support for the Patriot Act. The act, he said, has worked to allow the government to break up numerous cells of terrorists. "We have been able to follow the money," Davis said. "I think there’s a very strong terrorist threat, and they don’t follow any rules."
Others asked when U.S. troops could be taken out of Iraq Davis acknowledged that mistakes may have been made. "Nobody’s going to sit here and defend every decision that was made," Davis said. But the troops must stay for a while longer. If the United States were to leave now, "you basically say to the jihadists, ‘You’ve won,’" Davis said.
Andrew Prokop of Vienna asked about the discussion surrounding reforming the tax code. He is skeptical that reform will be meaningful. "Every time they try to simplify it, I understand it less and less," Prokop said.
Davis acknowledged that the code tends to get more complex, and called the process of changing the code "a hodgepodge of special interests. Once a provision is in the code, it’s like eternal life," Davis said.
Some deductions, like those for home ownership, charitable donations and municipal bonds, Davis said, are not likely to end. Other than that, Davis said he would like to see some changes. "I would knock this out, and make it a lot flatter," he said.
One of the last issues discussed was energy policy. Nancy Byrd of Annandale asked Davis to oppose drilling for oil and gas in national parks.
Davis explained that he has voted against drilling in Alaska. He has also supported holding car manufacturers to higher mileage standards, and he even drives a hybrid SUV. Davis said that the real solution to energy issues will be the development of new technologies. "The Stone Age didn’t end because we ran out of stones," he said.