GROW Legislation Introduced

August 2005

Republicans introduced the Growing Real Ownership for Workers Act of 2005 (GROW), which would create individual investment accounts from Social Security’s annual surpluses.

The plan would provide a mechanism for paying for private accounts for Social Security, but does not address the issue of meeting the long-term funding requirements of the program.

The Social Security annual surplus is estimated to stop in 2017 and at that time the system will begin taking in less revenue than it is obligated to pay in benefits. The proponents of the GROW measure argue that future Congresses will address the funding source for the private accounts and will increase the size of the contributions to personal accounts, which initially would be small, as acceptance of them grows.

Currently, the surpluses are used to pay for other programs, so either those costs would need to be reduced or the deficits would rise.

House members say they expect the GROW Accounts Act to be incorporated into a broader retirement bill that should be introduced in the House Ways and Means Committee in September.