Today, Americans for Prosperity Foundation, our sister organization, released a bold new plan to reform the nation’s troubled Social Security program. The plan would give workers the freedom to keep payroll tax contributions in a personal savings account that they own and control, earning dividends that far outpace returns promised by Social Security.

Social Security spending now consumes over 20 percent of the entire federal budget, and according to official actuaries, the so-called Trust Fund will be completely bankrupt by 2036. This is a looming problem few have had the will to take on, including President Obama, whose recent budget did not address one of the most critical and well-documented threats to the American economy and society at large.

AFP Foundation Vice President for Policy Phil Kerpen said, “The current Social Security program is broken. There is no actual savings, no investment, and very soon it will not meet the needs of Americans entering retirement. Our plan offers personal savings accounts that put freedom and control back in the hands of the individual, safe from government bureaucrats who would see that money squandered.”

The personal savings account plan has already shown great success in Chile, which began offering the program to workers in 1981. In Galveston County, TX, public employees were offered a similar plan, and have enjoyed an average rate of return of 6.5%, compared with the paltry 1 to 1.5 percent return Social Security offers.

Click here to read the full plan, titled Freedom and Prosperity for the American Worker. Head author of the plan Peter Ferrara is available to the media for interviews.

“If adopted, this plan would solve the looming insolvency of Social Security, while resulting in the largest reduction in government spending and the largest tax cut in world history,” continued Kerpen.