Cato Forum Examines Interim Report

July 31, 2001

The debate over the commission's interim report continued the next day at a forum sponsored by the Cato Institute. Professor Thomas Saving, a member of the commission, explained the group's interim report with an emphasis on the fact that the current system is financially unsustainable. Saving strongly insisted the Social Security Trust Fund had no bearing on the program's solvency, and that without significant reform, the program will have to raise taxes, borrow money, or cut spending by 2016. Saving also explained that the current program penalized African-Americans, who, because of their shorter life expectancies, receive a lower rate-of-return than whites. Finally, Saving noted that market investment over long periods of time was remarkably safe and provided much higher returns than Social Security.

Commenting on Dr. Saving's remarks, Bob Bixby of the Concord Coalition agreed that Social Security was facing a financial crisis and that without reform the program would put a crushing tax burden on young workers. However, he cautioned that individual accounts were not a "free lunch" and would involve difficult political choices. Roger Hickey of the Campaign for America's Future, a leading anti-privatization group, accused the Cato Institute of being behind the commission's actions. "The Cato Institute's fingerprints are all over this report," he said. Hickey claimed that Social Security was not facing a financial crisis and provides an overall good deal for young workers. Michael Tanner, director of Cato's Project on Social Security Privatization contended that the debate over whether the program's financial trouble's start in 2016 or 2038 obscures the system's problems today--a poor rate of return and a lack of worker ownership and control.

To view the forum, click here.

2002 Index | 2001 Index | 2000 Index | 1999 Index | 1998 Index