Commission Resumes Hearings: Experts Debate Privatization

October 22, 2001

The President’s Commission to Strengthen Social Security held its first public meeting since before September 11th and heard testimony from a cross-section of experts on the issue. Among those testifying was Michael Tanner, director of Cato’s Project on Social Security Privatization, who told the commission that successful Social Security reform must go beyond restoring the system to solvency and provide younger workers with a higher rate of return, ensure fairness for women, minorities, and low-income workers, and allow low-income workers to accumulate wealth. Tanner also called on the commission to go beyond two-percentage point accounts and allow much greater levels of privatization.

Others testifying included: syndicated columnist Amy Holmes, Maya MacGuineas of the New America Foundation, Meredith Bagby of the Third Millennium, Hans Riemer of the 2030 Center, Sylvester Schieber of Watson Wyatt Worldwide, Gene Steuerle of the Urban Institute, Alicia Munnell of Boston College, John Goodman of the National Center for Policy Analysis, and Vincent Sombrotto of the National Association of Letter Carriers.

These experts provided a vigorous debate on the pros and cons of individual accounts. However, little new ground was covered. Critics suggested that privatization was too “risky,” but failed to provide a detailed proposal of their own for reforming Social Security. Sombrotto and Riemer suggested some form of tax increase, while Munnell supported government investing. Supporters of individual accounts focused on the need to reform the system without burdening younger workers, the dangers of government investment, and the importance of allowing low-income workers to accumulate wealth.

The Cato Institute video-recorded the commission hearing. To watch, click here.

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