Wisconsin Congressman Paul Ryan, R-Janesville, officially introduced a Social Security privatization plan Wednesday that he says will cure the “serious financial crunch” plaguing the current system.

Ryan’s Social Security Personal Savings Guarantee and Prosperity Act, co-authored by Sen. John Sununu, R-N.H., promises to address the program’s long-term solvency. Social Security is currently projected to start running at a deficit in 2018, and, by 2041, reserves in the Social Security Trust Fund are expected to run dry.

“Those who say there’s no problem and there’s plenty of time are offering a misleading argument that the Social Security Trust Fund somehow has assets that can be used to draw upon starting in 12 years to pay benefits, but the trust fund does not contain cash or bonds or stocks to turn into funds,” Ryan said in an interview. “It contains IOUs reflecting the rate of the trust fund over the last few decades.”

Under the bill, workers younger than 55 can create a voluntary investment account with a portion of the payroll taxes currently funding Social Security benefits. Although the 10-year plan is very similar to President Bush’s, it is unique in its pledge to combine large personal accounts without slashing benefits or increasing taxes.

The proposal would use current Social Security surpluses and domestic spending cuts as financial fuel for its $1.1 trillion price tag. The program’s creators will try to lower its initial costs by phasing in private accounts more slowly.

The congressman said his bill would prevent a poor tax-rate return and would address the program’s long-term solvency. It would also raise the level of autonomy one has over his or her Social Security finances.

“The added benefit for your money is that the government can’t take it away from you. The benefit for society is that it substantially decentralizes the concentration of wealth in America,” Ryan said.

Democrats have disagreed with the immediate need to institute such a reform because of the Social Security Trust Funds.

Jeremy Janes, AARP Wisconsin associate state director for communications, labeled the current system as a “bit of a red herring.”

Furthermore, he said Ryan’s plan would endanger the benefits of disabled, retired and widowed persons who depend on Social Security funds.

“The Social Security system is not just a retirement program — it is also income protection,” Janes said.

UW graduate student Rachel Girshick said she did not trust the plan’s reliability on a healthy market.

“A lot of people have argued it gets rid of the ‘security’ part of Social Security,” she said.

The president’s and Ryan’s ideas on privatization are not limited to the United States. For the last two decades, Britain has substituted private investment accounts for a part of government pension benefits. Some international political pundits have labeled the experiment as a failure, however, because administering private accounts greatly reduced the size of retirement funds and returns.