<html> <head> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> <title>New Page </title> </head> <body>   <table BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="620"> <tr ALIGN="CENTER" VALIGN="top"> <td COLSPAN="3" ALIGN="CENTER" VALIGN="MIDDLE"><img SRC="../../images/spacer.gif" ALIGN="BOTTOM" WIDTH="620" HEIGHT="10" BORDER="0"> </td> </tr> <tr ALIGN="LEFT" VALIGN="TOP"> <td WIDTH="145" ALIGN="LEFT" VALIGN="TOP"> <img SRC="../../images/spacer.gif" ALIGN="BOTTOM" WIDTH="145" HEIGHT="4" BORDER="0"> <table width="145" bgcolor="#3399CC" cellpadding="0" cellspacing="0" border="0"> <tr> <td width="145" colspan="2"><img src="../../images/spacer.gif" align="BOTTOM" width="145" height="5" border="0"><a href="../../index.html"><img src="../../images/home_wh.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="26"></a><img src="../../images/spacer.gif" align="BOTTOM" width="145" height="5" border="0"><img src="../../images/topcurve.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="9"><a href="../../new/index.htm"><img src="../../images/new_wh.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/whline.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"><a href="../../facts/index.htm"><img src="../../images/facts_wh.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/whline.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"><a href="../index.htm"><img src="../../images/opinion_rd.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/redline.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"><img src="../../images/submenus/reform_proposals.gif" WIDTH="145" HEIGHT="14"></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="../../facts/Basics/prop_reforms_1.htm">Overview</a></td> </tr> <tr> <td colspan="2" width="145"><img src="../../images/submenus/testimony.gif" WIDTH="145" HEIGHT="14"></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="http://www.socsec.org/opinions/testimony/munnell3.htm" style="color: rgb(255,255,255)">Alicia Munnell</a>     6-3-98</td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="http://www.socsec.org/opinions/testimony/ball.htm" style="color: rgb(255,255,255)">Robert Ball</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="http://www.socsec.org/opinions/testimony/munnell2.htm" style="color: rgb(255,255,255)">Alicia Munnell </a>     4-22-98</td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="http://www.socsec.org/opinions/testimony/munnell.htm" style="color: rgb(255,255,255)">Alicia Munnell </a>      1-21-98</td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="../testimony/leone_intro.htm" target>Richard C. Leone</a></td> </tr> <tr> <td colspan="2" width="145"><img src="../../images/submenus/editorial.gif" WIDTH="145" HEIGHT="14"></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="http://www.theatlantic.com/issues/98jul/socsec.htm">Misconceptions</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"><img src="../../images/subarrow44w.gif" WIDTH="44" HEIGHT="7"></td> <td width="101" bgcolor="#000033" align="left"><a href="weinstein.htm" style="color: rgb(255,255,255)">SS vs Securities</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="http://www.socsec.org/opinions/papers/hurt_women.htm" style="color: rgb(255,255,255)">Privatiz. & women</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="workdrop2.htm" style="color: rgb(255,255,255)">Work</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="honeypot2.htm">Honey Pot</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="http://www.socsec.org/opinions/papers/chile_over_cliff.htm" style="color: rgb(255,255,255)">Chasing Chile</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="rcloped12.htm">Boo!</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="editorial.htm">Wrong Way</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="leone_what_crisis.htm">What Crisis?</a></td> </tr> <tr> <td width="44" bgcolor="#000033" align="RIGHT"></td> <td width="101" bgcolor="#000033" align="left"><a href="leone_worry.htm">Gen-X</a></td> </tr> <tr> <td colspan="2" width="145"><img src="../../images/whline.gif" WIDTH="145" HEIGHT="10"><a href="../../players/index.htm"><img src="../../images/play_wh.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/whline.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"><a href="../../newsroom/index.htm"><img src="../../images/nroom_wh.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/whline.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"><a href="../../library/index.htm"><img src="../../images/library_wh.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/basecurve.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="9"><img src="../../images/spacer.gif" align="BOTTOM" width="145" height="5" border="0"><img src="../../images/top_piece.gif" WIDTH="145" HEIGHT="8"><a href="../../newsearch/index.htm"><img src="../../images/search_wh.gif" align="BOTTOM" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/whline.gif" WIDTH="145" HEIGHT="10"><a href="../../contact/index.htm"><img src="../../images/contact_wh.gif" border="0" WIDTH="145" HEIGHT="10"></a><img src="../../images/bottm_piece.gif" WIDTH="145" HEIGHT="8"></td> </tr> </table> </td>  <td ALIGN="LEFT" VALIGN="TOP"><img SRC="../../images/spacer.gif" ALIGN="BOTTOM" WIDTH="15" HEIGHT="250" BORDER="0"> </td>  <td ALIGN="LEFT" VALIGN="TOP"> <table BORDER="0" CELLPADDING="0" CELLSPACING="0"> <tr ALIGN="LEFT" VALIGN="TOP"> <td ALIGN="LEFT" VALIGN="TOP"><img SRC="../../images/lngline.gif" ALIGN="BOTTOM" BORDER="0" WIDTH="460" HEIGHT="12"> </td> </tr> <tr ALIGN="LEFT" VALIGN="TOP"> <td ALIGN="RIGHT" VALIGN="TOP"><img SRC="../../images/ssn_sml.gif" ALIGN="BOTTOM" BORDER="0" WIDTH="200" HEIGHT="22"> </td> </tr> <tr ALIGN="LEFT" VALIGN="TOP"> <td ALIGN="LEFT" VALIGN="TOP"> Social Security vs. Securities <blockquote> By James Weinstein      House Speaker Newt Gingrich wants to use most of this year's $39 million budget surplus to reduce income taxes on the wealthy.  President Clinton, however, insists that the social security system is in crisis, and that no part of the surplus should be spent on reducing taxes or on new social programs until the solvency of the social security is ensured.  But Clinton, cleverly, is using a false issue in order to avoid making hard decisions about how to spend the surplus. As we've pointed out before, the so-called crisis of the Social Security system is illusory.  The Social security Administration (SSA) keeps pushing back the fateful date on which it says the Social Security fund will go dry.  Last year, SSA's estimated that the system would run out money in 2020.  But this prediction had no sound basis.  Just last month, because of strong economic growth.   SSA changed doomsday to 2032.      SSA's projections sound so dire because they are based on an estimated annual GDP growth of only 1.49 percent, even though GDP has grown at an annual average of 3.5 percent for the past 75 years.  If future growth is anywhere near the average for the 20th century, Social security will remain solvent indefinitely, without tax increases or benefit cuts.      Make no mistake: The so-called Social security "reformers" are out to undermine the system, not to save it.  That is clear from two major proposals made last month by the National Commission on retirement Policy, a private group of lawmakers, economists, pension-system experts and businessmen- many of them friends of Bill- who want to overhaul Social security.  First, the commission called for raising the qualifying retirement age to 70.  Second, it proposed that individual retirees invest some of their benefits in the stock market.      The first proposal would impose great hardships on older Americans, especially African-American men, whose life expectancy only recently reached 65, the current qualification age.  Congress has already mandated a rise to 67; raising the bar another three years means that the majority of African-American men, after paying a lifetime of Social Security taxes, will die without ever receiving a penny of the system's benefits.      The second proposal is equally harmful.  Under it, millions of investment portfolios would have to be created and workers would make their own decisions about what stocks to buy.  The theory here is that the stock market will rise at a greater rate than the interest paid on the special bonds in which the surplus is now supposed to be invested, and will therefore keep the system solvent.  But the idea of leaving investment decisions to millions of amateur investors is an invitation to multiple disasters.  The main beneficiaries of this system would be the stockbrokers, who, of course, would charge for managing each account and for every individual transaction.  Wall Street would make a killing under such reform, while the average working person would be at the mercy of a market that will not keep rising forever.      Furthermore, this arrangement would destroy the extreme efficiency of the current system, under which administrative costs are less than 1 percent of benefits.  The government would have to raise taxes in order to cover the costs of managing the millions of portfolios.  Ironically, a small tax increase, all by itself, would keep the current system solvent forever.      Instead of messing up the most successful of all our government programs, we should be improving it.  We should keep the retirement age at 65, or even lower it, and increase survivor benefits.  We should increase payments under Medicare, increase disability payments and cut the disability waiting period from six months to two.  And we should cut the Social security tax rate for those who earn less than $25,000 a year, and raise the cap on contributions to the Social security fund from the present limit of $68,400 to $200,000.      If Clinton means that the budget surplus should be used to strengthen and improve the Social security system in any of these ways, we would cheer him on.  Unfortunately, neither his record nor the declared intentions of his allies point in that direction.  His talk about guaranteeing the solvency of the system is disingenuous. By perpetuating a myth of crisis, he is unnecessarily putting ah old on new spending for the many social programs that desperately need expansion, and preparing the way for further cuts in benefits. </blockquote> <dir> <dir>   </dir> </dir> </td> </tr> <tr ALIGN="LEFT" VALIGN="TOP"> <td ALIGN="LEFT" VALIGN="TOP">An editorial piece reprinted from the June 28, 1998 issue of the bi-weekly news magazine   <a href="http://www.inthesetimes.com/">In These Times</a>. <img SRC="../../images/lngline.gif" ALIGN="BOTTOM" BORDER="0" WIDTH="460" HEIGHT="12"> </td> </tr> <tr ALIGN="LEFT" VALIGN="TOP"> <td ALIGN="CENTER" VALIGN="TOP">Site produced by The Century Foundation/Twentieth Century Fund 1998 </td> </tr> </table> </td> </tr> </table> </body> </html>