Shaw Has a Plan
August 14, 2002
Tony Fransetta, President of the Florida Alliance for Retired Americans, contributed an opinion article to Florida's Sun-Sentinel criticizing Congressman Clay Shaw's (R-FL) Social Security proposal. Shaw's bill (HR 3497) would allow workers to establish personal retirement accounts on top of the traditional Social Security program. According to Fransetta, Shaw's approach is wrong:
"Shaw's legislation contains a constant risk of major cuts in Social Security benefits. After all, if there is not much money in the investment accounts because the stock market has tanked, then the government can't tax it away in order to pay for Social Security. Social Security benefits would have to be cut." "The next Congress is going to vote on Social Security privatization. Although Shaw's plan has been introduced as legislation (H.R. 3497), the fact that he refuses to hold hearings, debate it or vote on it in his own committee indicates that he does not want his own plan aired until after Election Day. And that pretty much says it all." Social Security analyst Andrew Biggs responds to Fransetta's argument in the following letter: "Tony Fransetta claims the fact U.S. Rep. Clay Shaw has not held hearings on his Social Security reform proposal 'pretty much says it all,' implying that the lack of hearings proves the proposal is weak. Whatever one's view of the Shaw bill, Rep. Shaw has put his ideas on the table. Fransetta's criticism of the Shaw proposal -- however flawed (and it is flawed) -- is based on the reams of data Shaw has released." "Fransetta's 'says it all' test should apply to the opponents of personal accounts who will not even put their plans on the table. Would they raise taxes, cut benefits, increase the retirement age, or have the government itself invest the trust fund in the stock market? We can only guess, because they refuse to say." For more information, see Michael Tanner's delineation of alternatives to Social Security reform, "No Second Best: The Unappetizing Alternatives to Social Security Privatization."
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