Published October 17 2010
Berg, Pomeroy tackle Social Security
On Nov. 2, North Dakota voters will decide the fate of the state’s only U.S. House seat.
In his bid for a 10th term, Democrat Earl Pomeroy faces a strong challenge by Fargo legislator Rick Berg – a Republican who’s consistently led Pomeroy in monthly polling.
The Forum asked Berg and Pomeroy where they stand on a host of issues, and each week leading up to Election Day, we’re highlighting their positions on topics including the economy, the federal budget, health care, Social Security, agriculture, energy and Red River Valley flood protection.
Previously, we analyzed the candidates’ positions on the economy, the federal budget, health care, energy and agriculture.
This week: a look at Social Security.
In focus: Social Security
In 1935, President Franklin Delano Roosevelt signed the Social Security Act into law, establishing a federal program that would provide supplemental income to retired American workers.
In the 75 years since, the program has been amended to include disability insurance for workers and health care coverage under Medicare.
About 117,000 North Dakota residents – or 18 percent of the statewide population – received Social Security benefits in 2008.
But, as a growing percentage of America’s population faces retirement, the Social Security system has become increasingly strained.
Projections show the system has enough money through income tax collections and its trust fund to pay out full benefits to eligible Americans only until 2037.
Federal leaders agree the system needs a long-term solution, but there is much disagreement on just what that solution ought to be.
The Social Security system faces a basic economic problem: too much demand, not enough supply.
For the average American worker, that reality means once-guaranteed benefits might not be available for those facing retirement after 2037.
Under current projections, that’s when all funding reserves would run out and retirement benefits would face a 25 percent hit because there won’t be enough money from the American work force coming in to the system.
That is, unless federal leaders come up with a way to guarantee the Social Security system’s viability for the long haul.
The candidates for North Dakota’s U.S. House seat have their own proposals on how that could be done – including one option that has the potential to impact Theodore Roosevelt National Park in western North Dakota.
But in the midst of the debate, Democratic incumbent Earl Pomeroy and Republican challenger Rick Berg also have traded attacks on each other’s past actions on whether to privatize the federal entitlement program.
State of affairs
The Social Security system is funded through a combination of revenue gained through a trust fund and a percentage of the federal income tax that all American workers pay.
While the trust fund continues to blossom, the recent economic recession struck a substantial blow to the program’s income tax revenue.
Millions of unemployed Americans haven’t been paying into the system – which has subsequently resulted in a $41 billion deficit this year for that segment of Social Security’s intake.
The Social Security Administration reports the negative figure is only temporary and should rebound as early as 2011, once more Americans are back to work.
But Berg says the staggering deficit indicates Social Security faces a crisis now – not in 2037.
Pomeroy disagrees, saying because the trust fund remains profitable, there’s time to craft a long-term solution before benefits would be threatened by the looming challenges.
Berg proposes bringing additional dollars into Social Security through profiting from oil leases on federal lands that have untapped mineral reserves.
He has said such an approach could draw “billions of dollars” more into the program but has not provided specific data to reinforce his claim.
Meanwhile, a specific portion of his proposal has drawn vocal reactions from both sides of the aisle for the impact it might have on the natural landscape.
Berg first told The Forum’s editorial board last month that national parks – and specifically North Dakota’s Theodore Roosevelt National Park – could be included in his plan.
However, if that were done, he said he would only support horizontal drilling underneath the park.
The federal government allows drilling on some public land, including the national grasslands in western North Dakota, but drilling is banned in national parks with only a few exceptions. Theodore Roosevelt National Park isn’t among them.
Berg’s proposal has sparked a fiery campaign debate between him and Pomeroy.
Shortly after stating his comments in regard to the national parks, Berg re-worked his pitch on Social Security and now mentions the national parks angle only when challenged by Pomeroy.
In that event, Berg is then quick to emphasize his western North Dakota roots and his position on the Medora Foundation board – factors he didn’t mention in the original discussion with The Forum’s editorial board.
Pomeroy has accused Berg of back-tracking on his comments and criticized him numerous times on what Pomeroy says is a lack of knowledge when it comes to both oil drilling and Social Security.
Pomeroy said even with horizontal drilling, there would still be a visible impact on the surface – which would be a detriment to the beauty of such a “national treasure.”
“To think that you can fill (Social Security) by blanketing Theodore Roosevelt National Park with oil wells is just nutty,” Pomeroy said after first hearing the specifics of Berg’s proposal.
For his part, Pomeroy does not advocate for a specific plan to ensure Social Security’s solvency but instead says he wants to look at long-term solutions that won’t cut benefits.
In March, Pomeroy was named chairman of the House Social Security subcommittee – a position of seniority within Congress that he says makes him “the first line of defense at holding Social Security absolutely secure for our seniors.”
In recent months, Pomeroy and Berg have also sparred over each other’s records on whether they supported privatizing Social Security in the past.
Both said this year they don’t support it.
Many of Pomeroy’s initial ads this fall accused Berg of “voting to privatize Social Security” while in the state Legislature.
Berg’s campaign denounces the claim as false since state legislators don’t hold any sway over federal programs.
However, in 2005, Berg was the primary sponsor on a resolution in the North Dakota Legislature that endorsed President George W. Bush’s plan to fix Social Security.
Bush’s proposal would have allowed Social Security participants to set aside part of their payroll tax payments into private accounts tied to the stock market. The plan was met with extreme unpopularity and was never formally introduced in Congress.
Last month, Berg said the Legislature’s initiative was meant to support Bush in advance of the president’s visit to Fargo that year.
Berg said he defines “privatizing Social Security” as any measure that would change the program’s guaranteed benefit into something more volatile.
But when asked whether Bush’s plan had that result, Berg attempted to change the conversation.
After being pressed specifically if Bush’s plan was a privatization of Social Security, Berg said: “I haven’t revisited that.”
“All I can say is that my position is I don’t support privatization,” he said. “I support getting solutions to honor the promise to the people who have Social Security.”
Rather, Berg says Pomeroy is the one who once led the charge in Congress to privatize Social Security.
It’s a moment in Pomeroy’s record that’s previously been a campaign issue for the nine-term incumbent, but Pomeroy says it’s been twisted out of context.
During the summer of 1998, Pomeroy was quoted in national newspapers as having been the designated leader to develop a plan that would allow up to 50 percent of Social Security taxes to be invested in the stock market.
But the discussions didn’t go very far, Pomeroy said, and no formal legislation was ever introduced.
Pomeroy said, unlike Bush’s plan that Berg endorsed, his idea would not have threatened the guaranteed benefits of Social Security participants.
Pomeroy said he defines privatizing Social Security as referring to “private accounts” tied to the system; therefore, he says his plan was not privatization.
“Social Security has defined benefits. We’re saying, ‘If you pay in, here’s what we’re going to give you,’ ” Berg said. “If we take that away, then that becomes privatization, and that’s where, again, Congressman Pomeroy was going to put 50 percent of the money in the stock market. Then you’re not necessarily defining a benefit, you’re hopeful that this generates a return.”
Pomeroy said his nine-term record has been clear on Social Security.
“My record is 100 percent consistent with making sure that the benefits paid under Social Security are guaranteed and not subject to change based on performance in the stock market,” he said.
Readers can reach Forum reporter Kristen Daum at (701) 241-5541