Retirement Security Program

Summary of Remarks

The second panel of the Real State of the Union, "Rethinking Domestic Policy" was moderated by Morton Mondracke, executive editor of Roll Call. The discussion focused on fundamental problems at the core of American domestic policy, including asset management, health care, and improving standards for all Americans.

Ray Boshara, Director of New America's Asset Building Program, led off the discussion by focusing on the "ownership society." Mr. Boshara defined the current economic social status in the United States as… more

Could a reformed public pension system give citizens more control over their retirement savings, as conservatives want, without undermining security in old age, as liberals fear? Here is a proposal that does just that in the American context, although it could apply equally well to any public pension system struggling with long-term debts and an ageing population.

The idea is to allow all US workers to divert a portion of their payroll taxes into personal "early retirement accounts",… more

Social Security is a mess. With the oldest babyboomers now four years away from qualifying for benefits, the program faces a shortfall of $12.7 trillion. To close the deficit, the program would need to cut benefits by 27% by the time today's 25-year-olds retire. And yet in this silly season, neither presidential candidate is offering a viable solution: Kerry says he won't touch Social Security; Bush promises an expensive privatization plan that would leave individuals with huge market risks.… more

Social Security, the single largest government program, faces hundreds of billions of dollars in annual deficits, and changes will have to be made to the program. While the Presidential candidates are not yet focusing on Social Security reform, many in Congress are. A number of plans have been offered this year. The recent report by the Congressional Budget Office, "The Outlook for Social Security," provides a new framework for comparing different approaches to reform.

Douglas Holtz Eakin, the Director of the… more

We have become accustomed to thinking that taxes, like hemlines, can only go up or down. This isn't true. Over the centuries changes in the form of U.S. taxes have been at least as dramatic as changes in the rate of taxation.

For instance, most federal revenues now come from personal and corporate income taxes, and from the payroll taxes that fund Social Security and Medicare. But most government revenues originally came from excise taxes on luxury items such as… more

Policymakers today confront a number of profound developments, whose significance is certain to increase over the next several decades. Some of these are widely anticipated: demographic and climate change, the scarcity of natural resources, and public health. Other structural issues, such as globalization, rapid technology change, and security threats, will continue to transform the world economy.

Who Will Pay?, recently profiled in The Economist, makes the case that, despite the fact that generating debate, let alone action,… more

With nearly 3 in 5 Americans invested directly or indirectly in stocks, conservative strategists view this growing segment of voters as a new "Investor Class" whose members will increasingly embrace free-market and small-government policies as their investment portfolios grow. Democratic strategists question the premise of an Investor Class, arguing that even middle-income Americans own only small, 401(k) pension accounts and their interests are far-removed from the top 5 percent who benefit most from recent tax cuts. This debate… more

While Democrats and Republicans continue to bicker about tax cuts, they are ignoring the debate we should be having. That is, how can this nation fundamentally reform the tax code to achieve three critical goals: simplification, economic growth, and equitable tax burdens? What we need is a complete overhaul of our tax system -- from one that encourages a debt-consumption economy to one focused on saving and investment. This can best be done by instituting a "progressive consumption tax."

The… more

Finding a solution to the problems facing the Social Security system will be one of the more formidable tasks Congress is faced with in upcoming years. The nation's public retirement system is the primary provider of funds for the majority of retirees and the largest direct tax on most workers. Implementing changes will therefore be a tricky balancing act between ensuring adequate benefit levels and managing costs. Reforms are further complicated by the intergenerational nature of the program: Decisions have… more