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- Title
The Need for Social Security Reform and the Implications of Funding Benefits Through Personal Security Accounts.
- Authors
Schieber, Sylvester J.
- Abstract
The article describes the Personal Security Account (PSA) approach and addresses the reasons why five members of the Social Security Advisory Council thought that the PSA plan was the best way to deal with Social Security reform. In considering policies to deal with Social Security's actuarial imbalances, policy makers cannot ignore the larger context of the government's total fiscal operations. It was this combination of considerations that drove the members of the Social Security Advisory Council in very different directions in proposing solutions to the current imbalances in the system. In the interest of greater intergenerational fairness, the proponents of the PSA plan proposed that the transition not be financed purely on a pay-as-you-go basis but be spread out over a longer period. There is an alternative way to bring the PSA plan into fiscal balance that does not involve a tax increase. That would be to reduce the federal government's contribution to the PSAs from 5% to 3.5% and then mandate that workers make a 1.5% contribution of covered Social Security wages to their own PSA.
- Subjects
SOCIAL security; PUBLIC finance; ECONOMIC security; GUARANTEED annual wage; OLD age assistance; INSURANCE statistics
- Publication
Benefits Quarterly, 1997, Vol 13, Issue 3, p29
- ISSN
8756-1263
- Publication type
Article