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ANIMAS HIGH SCHOOL MODEL SENATE

Committee: Finance Committee

Principal Authors: Dean Heller (Philip


Wiley) Pat Toomey (Ian Duthie)

Bill No:

Submission Date: 11/30/2015

Title of Bill: Social Security Partial Privatization Bill


BE IT ENACTED BY THE ANIMAS HIGH SCHOOL MODEL CONGRESS
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Preamble: Whereas, in 2014, 22% of married retirees and 47% of unmarried retirees relied
on Social Security for 90% or more of their income and since 36% of non-retired people
expect to depend on Social Security as their main source of income after retirement, and
since $851 billion was spent on Social Security in 2014 and since, at this rate, Social
Security will become insolvent by 2034,
SECTION 1: Create a partial privatization of the Social Security Program by-Sub-SECTION A: Legalizing a method for private companies to compete
against the government offered program, while still requiring all citizens to have
either form of Social Security.
SECTION 2: Provide insurance from company failures by-Sub-SECTION A: Enabling a FDIC equivalent program to protect citizens
investments and to establish the publics confidence in private Social Security
programs.
SECTION 3: Enable the switch from government social security to private by-Sub-SECTION A: Offering an exemption from the social security tax to those
who choose to switch.
(A) The private companies will be allowed to charge no less than
one percent less than the current government rate to ensure that
fair, livable benefits are still viable.
Sub-SECTION B: Preventing those who have been buying into social security for
20 years or more from transferring to the private market.
Sub-SECTION C: Offering a transfer of Social Security accounts from the
government into the private market.
(A) These companies would then compensate the federal
government with an amount of stock equivalent to the total
value of payed taxes in the formerly federal Social Security
accounts of users now covered by the private market.
SECTION 4: Prevent 100% private company takeover by-Sub-SECTION A: Allowing private companies partaking in the social security
system to account for no more than 50% of total retirement, disability, and survivor
benefits.

37 SECTION 5: This bill shall go into effect 91 days after passage and will come up for re38 authorization in 2043.
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**In order to fully understand the proposed bill and the change to Social Security proposed
in it, refer to the following appendices.
Appendix I:
Section 1: Create a partial privatization of the Social Security Program. The following
shift of the source of Social Security funding pertains to the Governments inability to pay
all Social Security benefits by 2034. In 2014 $851 billion was spent on Social Security.
Due to the increase in cost of many of lifes necessities and the retiring of the Baby Boomer
generation. Gradually shifting 50% of Social Security into the private market would cut
government spending proportionally and enable the government to pay for the benefits of
those whom it still covers.
Appendix II:
Section 3: Sub-SECTION C (A): These companies would then compensate the federal
government with an amount of stock equivalent to the total value of payed taxes in the
formerly federal Social Security accounts of users now covered by the private market. The
following section pertains to the loss of income that would occur given a 50% cut in total
income from Social Security taxes. In 2014, the United States Government was required to
pay $74 billion more in Social Security benefits than it made in Social Security taxes. In
2015 this projected negative cash flow would increase to $84 billion. Reducing spending by
half would help reduce this figure, however it comes with a proportional income decrease
thus perpetuating the overall problem. Providing additional income in the form of company
stock, which the government could than sell, would negate the income loss and may even
provide a degree of surplus in this area.