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Social Security Reform Has Withered but Program Still Needs
Help
Author Nancy Altman says the problem is not
that hard to solve
Feb. 1, 2005 – Social Security Reform, a buzz
phrase for the last few years, seems to have come and gone on the agenda
of President George W. Bush, as indicated by the lack of support in his
State of the Union last night. There is, however, a financial problem for
the program somewhere out there in the future. Nancy J. Altman, an
author and former assistant to Alan Greenspan, says in the following
opinion piece that the program is still vital and financial security is
not that difficult to achieve.
Opinion
What’s Next for Social Security?
By Nancy J. Altman
Feb. 1, 2006 - It was just over one year ago that
President Bush, fresh from his re-election victory, announced that
substituting private accounts for a part of Social Security’s guarantee
would be a top priority of his second term. In so stating, President
Bush broke ranks with every former President, Republican and Democratic
alike. All had understood the value and importance of Social Security.
Even President Bush’s own father said in his 1990 State of the Union
address, “The last thing we need to do is mess around with Social
Security.”
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The current President spent much of 2005 warning
that “the crisis is now” for Social Security. His headline-grabbing,
alarmist rhetoric stirred up a great deal of anxiety but no concrete
action. President Bush’s Social Security proposal appears dead, at least
for now, but the projected long-range shortfall remains. So what happens
now?
President Bush argued that Social Security is a
Depression-era program that is out of date. On the contrary, President
Franklin Roosevelt and every other President, with the exception of the
current one, envisioned Social Security as a permanent institution in
American life.
Social Security is in place so that every American
worker for all time will have a reliable, stable source of income from
which to draw in old-age, and will have protection for their families in
the event of death or disability.
This vision is as relevant and important today as
it was when Social Security was first enacted. In a world where the
private pension system is in trouble, and where savings are at their
lowest rate since the 1930’s, Social Security’s rock solid guarantee of
a floor of protection in retirement is more necessary than ever.
But is Social Security sustainable in the face of
an aging population? Absolutely. Social Security’s projected shortfall
several decades away is one of the easier to solve of the major problems
facing the nation.
The solution simply requires balancing income and
outgo for the long-run, and there are several ways to achieve that
balance. I favor three changes – gradually restoring the maximum taxable
wage base to where it was historically, covering ninety percent of all
wages; converting the residual estate tax to a dedicated Social Security
tax; and diversifying Social Security’s investment portfolio, so that it
is invested in stocks as well as bonds.
All of these are good policy in their own right
and, together, solve the deficit. They involve no benefit cuts, no
increase in the payroll tax rate, and, for that matter, no increase in
taxes at all for about 94 percent of all American workers. The details
are spelled out in my book, The Battle for Social Security: From FDR’s
Vision to Bush’s Gamble (Wiley, 2005).
The real issue for Social Security is one of
politics and perception; not economics and the aging population. It is
imperative that in 2006, Americans elect political leaders who are
committed to Social Security.
If those leaders unite behind its fundamental
philosophy and structure, Social Security’s deficit can be eliminated
and this vital American institution will continue to fulfill President
Roosevelt’s vision for our children, grandchildren and all future
generations.
About Nancy Altman
 Nancy
J. Altman has a thirty-year background in the areas of private pensions
and Social Security. She is currently the Chairman of the Board of
Directors of the Pension Rights Center, a nonprofit organization
dedicated to the protection of beneficiary rights.
From 1983 to 1989, Ms. Altman was on the faculty of Harvard University's
Kennedy School of Government and taught courses on private pensions and
Social Security at the Harvard Law School. In 1982, She was Alan
Greenspan's assistant in his position as chairman of the bipartisan
commission that developed the 1983 Social Security amendments. From 1977
to 1981, she was a legislative assistant to Senator John C. Danforth
(R-Mo,), and advised the Senator with respect to Social Security issues.
From 1974 to 1977, she was a tax lawyer with Covington & Burling, where
she handled a variety of private pension matters.
Ms. Altman is a graduate of Radcliffe College and the University of
Pennsylvania Law School. She was on the organizing committee and the
first board of directors of the National Academy of Social Insurance, a
membership organization of over 700 of the nation's leading experts on
social insurance. In addition to her work on retirement income, Ms.
Altman is an assistant producer of the award-winning high school quiz
program, "It's Academic."
You can find out more
about Nancy J. Altman and her new book at
www.thebattleforsocialsecurity.com
Professional Publications
In addition to
current opinion pieces that Nancy J. Altman has written, her work
has appeared in numerous publications in the past.
● "Government Regulation: Enhancing the Equity,
Adequacy and Security of Private Pensions," in Private Pensions and
Public Policy, Organisation of Economic Co-operation and Development
(1992).
● "The Anti-Discrimination Rules (Including
Integration): Do They Make Sense? What are Alternatives?" - ALI-ABA,
Pension Invitational (1991).
● Written Statement on Private Pension Policy, Hearing
on Private Pensions before the Committee on Small Business, U.S. House
of Representatives.
● "ERISA and the American Retirement Income System,"
(with Theodore R. Marmor), 7 Journal of American Tax Policy 31 (1988).
● "The Effect of Pension Provisions on Work Effort in
2013," Proceedings of the Future of Retirement Symposium (1988).
● "The Reconciliation of Retirement Security and Tax
Policies: A Response to Professor Graetz," 136 University of
Pennsylvania Law Review 1419 (1988).
● "Medicare Financing: The Government's Share," (with
Alicia Munnell and James M. Verdier), in The Future of Medicare, Oxford
University Press (1988).
Wilbur Cohen: A Man of Justice - Editorial column, The
Austin American Statesman (1987)
● "The Noncovered Worker: What are the Alternatives?"
ALI-ABA, Pension Invitational (1987).
● "Rethinking Retirement Income Policies:
Nondiscrimination, Integration and the Quest for Worker Security," 42
Tax Law Review 433 (1987).
Fifty Years of Social Security Achievement - Editorial
column, The Boston Globe (1985)
● Written Statement on Retirement Income Policy,
Hearings on Retirement Income Security in the United States, before the
Subcommittee on Social Security and the Subcommittee on Oversight of the
Committee on Ways and Means, at 284 (99th Cong., 1st Sess.).
● "Influencing Retirement Behavior: A Further
Analysis," Journal of Policy Analysis and Management Vol. 3 No. 3
(Spring, 1984).
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