Social Security: Ponzi scheme or political football?

Social Security debate reignited with Rick Perry's critique of Social Security as a Ponzi scheme.

Social Security, which Republican front-runner Rick Perry has assailed as a "Ponzi scheme," has quickly emerged as a centerpiece issue in the battle for the GOP nomination, sparking a renewed debate over the so-called third rail of American politics.

Former Gov. Mitt Romney of Massachusetts has seized on the Texas governor's remarks in his bid to reclaim the lead in the Republican nomination race, saying Perry's assault on one of the revered legacies of the New Deal would imperil Republican efforts to defeat President Barack Obama.

The Perry campaign fired back Thursday, accusing Romney of inconsistencies on Social Security and saying that Perry is committed to repairing the 76-year-old retirement program.

"Governor Perry believes that Social Security for current beneficiaries, and those nearing retirement, can and must be protected," Ray Sullivan, the governor's campaign spokesman, said in a press release that seemed to soften Perry's stance. "Additionally, citizens of all ages, experts and elected officials must seriously discuss reforms to Social Security to make it financially sound and sustainable for the long haul."

The political uproar reflects continued concerns about the program's cloudy financial future at a time when millions of aging baby boomers are beginning to count on monthly Social Security checks for their retirement. Obama's blue-ribbon deficit reduction commission warned that "immense demographic changes will bring theSocial Security program to its knees" unless Washington enacts reforms to sustain it.

Perry first assailed Social Security as a "Ponzi scheme" in his book, "Fed Up." He stood behind his remarks in Wednesday's Republican debate in California.

"It's a Ponzi scheme to tell our kids that are 25 or 30 years old today, you're paying into a program that's going to be there," Perry said in his first national debate since becoming a presidential candidate in mid-August.

"Anybody that's for the status quo with Social Security today is involved with a monstrous lie to our kids, and it's not right."

Romney, who had been the Republican front-runner before Perry surged past him in the polls, defendedSocial Security and immediately served notice that he plans to use the issue to challenge Perry. "Our nominee has to be someone who isn't committed to abolishing Social Security, but who is committed to savingSocial Security," Romney said in response to Perry's remarks.

Democrats, who have made preserving Social Security one of their fundamental tenets, hammered both Perry and Romney and vowed to resist any effort to dismantle the program. National Democratic Chairwoman Debbie Wasserman Schultz, a Florida congresswoman, said Perry's remarks were "over the top."

Created in 1935, Social Security has long been considered virtually untouchable in the political arena, as evidenced by unsuccessful efforts by former President George W. Bush and others to try to create a private option to the benefits program. With more than 50 million Americans now drawing benefits, Social Security is the biggest government program in the world, accounting for the single largest expenditure in the federal budget.

But the program is facing increased financial pressure because of what experts say are the realities of demographics. The average life expectancy was 65 when President Franklin Roosevelt signed Social Securityinto law.

Today, Amerians live an average of 14 years longer, and more and more are going into retirement. At the same time, there are fewer workers to support the system through payroll taxes.

"Without action, the benefits currently pledged under Social Security are a promise we cannot keep," said members of the White House deficit reduction commission headed by former U.S. Sen. Alan Simpson, a Wyoming Republican, and Erskine Bowles, who served as chief of staff for former President Bill Clinton, a Democrat.

The commission's report, released in December, warned that current and future beneficiaries will face an immediate 22 percent across-the-board benefits cut in 2037 unless Congress enacts changes to strengthen the system.

Romney's campaign declared Thursday that Perry is "reckless, wrong on Social Security."

Romney, acknowledging the system is in need of repair, says there are "a number of options" to keepSocial Security solvent, including raising the eligibility age and changing the way benefits are indexed to inflation for high-income retires. He said he opposes raising payroll taxes or expanding the base of income to which the tax is applied.

But the Perry campaign said that Romney, in his book "No Apology: The Case for American Greatness," has been critical of the program. "His evolving and inconsistent position on this important issue is curious, but unfortunately not unusual," said Sullivan.