New Cato Study: Social Security Commission Recommendations a Strong Start

August 26, 2002

Although some members of Congress have attacked the recommendations of the President's Commission to Strengthen Social Security, a new Cato Institute study finds that the Commission's three reform proposals based on personal retirement accounts are viable ideas that should be followed up to ensure the solvency of a program that will go broke unless changes are made.

In "Perspectives on the President's Commission to Strengthen Social Security," Andrew Biggs, Cato Social Security Analyst and a staffer to the Commission in 2001, argues that criticism of the Commission's recommendations are misplaced. For example, Biggs says, "The commission was attacked for arguing that the Social Security Trust Fund does not effectively pre-fund future benefits. In fact, most of the Commission's critics held precisely the same view of the fund, until that view was used to buttress the case for personal accounts."

Under the three reform models presented by the commission, workers could invest part of their payroll taxes in a personal retirement account.

Biggs points out that under the three plans a personal account would be the property of the worker, thus preventing the government from raiding it to pay for other programs.

To those who argue that reforming Social Security isn't viable, Biggs has a different perspective: "The correct question isn't whether we can afford to reform Social Security, but whether we can afford not to."

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