Analysis of Current Social Security Reform Proposals
This paper provides an analysis of the long-run actuarial effects of four significant Social Security reform plans and their effects on representative workers. The reform plans include three plans establishing private accounts: the Social Security Guarantee Plan (proposed by Representatives Bill Archer and Clay Shaw), the Social Security Solvency Act of 1999 (Senator Moynihan), and the Bipartisan Social Security Reform Act of 1999 (Senators Gregg, Breaux, Kerrey, and others). A fourth plan is a hypothetical plan named the Trust Fund Investment Plan. This plan is a modified version of the Administration’s FY 2001 budget proposal calling for significant General Fund revenue transfers to the Social Security Trust Fund and providing for limited Trust Fund investments in equity. Each of the plans is shown to result in long-range actuarial balance of the Trust Funds under the assumptions most typically used by the actuaries of the Social Security Administration, but in the absence of an "equity premium" the Trust Fund would fail to achieve actuarial balance under the Social Security Guarantee Plan. Beneficiaries are shown to be affected differently under each of the reform options. In the absence of an equity premium, all reform plans that achieve actuarial balance result in a lower net benefit for a worker with lifetime average earnings. This occurs even though all but one plan makes significant use of General Fund revenues.
Volume (Year): 53 (2000)
Issue (Month): n. 3 (September)
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Julia Lynn Coronado & Don Fullerton & Thomas Glass, 2002.
"Long-Run Effects of Social Security Reform Proposals on Lifetime Progressivity,"
in: The Distributional Aspects of Social Security and Social Security Reform, pages 149-206
National Bureau of Economic Research, Inc.
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- Martin Feldstein & Jeffrey B Liebman, 2002.
"The Distributional Effects of an Investment-Based Social Security System,"
02-08, Center for Economic Studies, U.S. Census Bureau.
- Martin S. Feldstein & Jeffrey B. Liebman, 2002. "The Distributional Effects of an Investment-Based Social Security System," NBER Chapters, in: The Distributional Aspects of Social Security and Social Security Reform, pages 263-326 National Bureau of Economic Research, Inc.
- Martin Feldstein & Jeffrey Liebman, 2000. "The Distributional Effects of an Investment-Based Social Security System," NBER Working Papers 7492, National Bureau of Economic Research, Inc.
- Peter Diamond & John Geanakoplos, 1999.
"Social Security Investment in Equities I: Linear Case,"
99-10, Massachusetts Institute of Technology (MIT), Department of Economics.
- Peter Diamond & Jean Geanakoplos, 1999. "Social Security Investment in Equities I: Linear Case," NBER Working Papers 7103, National Bureau of Economic Research, Inc.
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