As we get closer to the midterm elections, the candidates are using commercials and campaign appearances to cement their claims in voters' minds. One hot-button issue in Congressional races surrounds funding for programs like Medicare and Social Security. Democrats generally favor these programs, while Republicans would generally prefer that these programs be changed or abandoned, because the amount the government is paying out is going up year after year.
In a recent speech, Congressional candidate Carlos Curbelo (R-FL) spoke about that issue and said that those programs were unsustainable. Speaking to a college Republican group, Curbelo said this:
"I speak about both of these programs as one because they both suffer from the same long-term insolvency, meaning that they won't be around for us, meaning that we're paying into a system that, you know, is a Ponzi scheme."
Our partners at PolitiFact looked into Curbelo's claim that compared Social Security and Medicare to a "Ponzi scheme." PolitiFact reporter Joshua Gillin says that Curbelo's statement rates FALSE on the Truth-O-Meter.
"Well, we've rated this one FALSE before, and that was when it was said by Texas Governor Rick Perry," said Gillin. "It wasn't correct then, and it's not correct now. Now, a Ponzi scheme is where investors are brought in and then promised huge returns and they're actually paid with the money that future investors bring in and eventually, you run out of people."
Gillin says that's where the Ponzi scheme falls apart, but Medicare and Social Security is a different circumstance entirely. "Social Security has defined benefits. You know you're going to be getting something from it, and then it's money that's taken out specifically for that purpose. There's no fraud involved here at all."
The biggest difference, according to Gillin, is that the government can change the rules whenever they want. That way, he says, the government can take action to always make both of those programs solvent, while the Ponzi scheme runs out of money. Based on these differences, PolitiFact rates Curbelo's claim as FALSE.
SOURCES: Social Security and Medicare a Ponzi scheme?
- PolitiFact ruling
- YouTube, Carlos Curbelo’s speech to George Washington University Republicans, Sept. 18, 2014
- Miami Herald’s Naked Politics blog, "Tracker video shows Carlos Curbelo calling Medicare, Social Security a ‘Ponzi scheme,’" Sept. 19, 2014
- Medicare.Gov, Medicare 2014 Costs at a glance, Accessed Sept. 24, 2014
- Center on Budget and Policy Priorities, "Social Security sense and nonsense," Oct. 2010
- Committee for a Responsible Federal Budget, "Updating the cost of delay for social security," Aug. 11, 2014
- Fix the Debt Coalition, "Electing to obfuscate on Social Security," Sept. 4, 2014
- PolitiFact, "How much have Medicare beneficiaries ‘paid in’ to the system?" Sept. 9, 2014
- PolitiFact, "Paul Ryan says Medicare going broke," June 5, 2014
- PolitiFact, "Rick Perry says Social Security is a Ponzi scheme," Nov. 14, 2010
- PolitiFact, "Rick Perry says Social Security is a Ponzi scheme," Sept. 12, 2011
- PolitiFact, "John Boehner says the Social Security trust fund faces imminent bankruptcy," Jan. 3, 2012
- Interview, Michael Tanner, Cato Institute, Sept. 22, 2014
- Interview, Paul Van de Water, senior fellow Center on Budget and Policy Priorities, Sept. 22, 2014
- Interview, Michael Tanner, senior fellow Cato Institute, Sept. 22, 2014
- Interview, Edward Lorenzen, senior advisor at the nonpartisan Committee for a Responsible Federal Budget, Sept. 23, 2014
- Interview, Joshua Gordon, policy director Concord Coalition, Sept. 23, 2014
- Interview, Wadi Gaitan, spokesman for Carlos Curbelo’s Congressional campaign, Sept. 22, 2014