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Social Security Reform Proposals , p . 1 Health Insurance Continues To Be Valued , p . 9 EBRI in Focus
| Content Provider | Semantic Scholar |
|---|---|
| Copyright Year | 1996 |
| Abstract | Introduction Among policymakers across the political spectrum, there seem to be two main points of consensus about Social Security. The first is the necessity for reform. The second is that reform ought to involve private market investment of retirement taxes1 and/or of national defined contributionstyle savings in order to give taxpayers a better return on their money than the current system affords and thereby reduce national retirement program costs. Here agreement stops and debate about specific reform packages begins. The Social Security Trustees stated in their 1996 annual report that, under intermediate assumptions about the economy and demographics, Social Security will be unable to meet its promises to beneficiaries by 2029. At this date, the trust fund surplus will be exhausted, and FICA tax revenue alone will be able to provide only 76 percent of benefits payable.2 Social Security surpluses are invested in U.S. Treasury bonds, which are projected to provide rates of return that exceed inflation by 2.3 percent.3 This is a low rate of return relative to the average aboveinflation yield of about 7 percent on equities over the past several decades.4 Proponents of private market investment of retirement taxes and/or of national defined contribution-style savings reason that investing in the equities market will provide better rates of return and thereby lower program costs. Some also believe switching retirement tax investment into the private sector will increase net savings and provide capital to spur economic growth. Advocates of allowing or mandating defined contribution-style savings within the national government retirement system similarly cite economic growth and increased savings as primary advantages. 5 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.ebri.org/docs/default-source/ebri-notes/1196notes.pdf?sfvrsn=3e87292f_0 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
