Kerrey, Rudman Blast "Do Nothing" Approach to Social Security Reform

August 19, 2002

In a recent Washington Post editorial Bob Kerrey and Warren Rudman, co-chairs of the Concord Coalition, criticized politicians who attack plans to reform Social Security, but fail to put forward their own proposals for fixing the troubled program. Kerry and Rudman point out that Social Security cannot pay promised future benefits and warn that failing to act is the same as agreeing to future benefit cuts or tax increases.

Suppose that a member of Congress introduced legislation called "the Social Security Do Nothing Act." Under this bill, promised retirement benefits would be cut by 16 percent for today's 30-year-olds, by 29 percent for today's 20-year olds and by 35 percent for today's newborns. Alternatively, payroll taxes would go up by roughly 40 percent in 2041. How many politicians would rush to endorse this bill? And yet these are the choices under the Do Nothing Plan.

As the authors point out, despite the problems of the current program, much of the reform debate focuses not on the insolvency of the present system but on plans introduced by the President's Commission to Strengthen Social Security. "Critics argue that the Commission's plans would result in deep benefit cuts, fiscally irresponsible general revenue transfers and undue risk when compared with the current system in a hypothetically solvent condition." While the authors note that criticism of the Commission's plans is valid, for a real debate to take place "not one between the Commission's plans and an impossible ideal but between the Commission's plans and the plans of its critics" opponents need to provide alternative reform options. The authors' state:

It is fundamentally unfair to judge them against a standard that assumes the current system can deliver everything it promises. It can't. Today's Social Security system promises far more in future benefits than it can possibly deliver. The relevant comparison for any reform plan is with what current law can deliver, not what it promises…No realistic reform plan looks good when compared with the false hypothetical of a perfectly solvent system.

2005 Index | 2004 Index
2003 Index | 2002 Index | 2001 Index
2000 Index | 1999 Index | 1998 Index