Winners and Losers under the Simpson-Bowles Social Security Plan
December 1, 2010
Every Social Security proposal has relatively clear winners and losers. The benefits it pays must (in the long run) be equal to the taxes it collects, and the distribution of both its tax burdens and its benefit payments are fairly straightforward to analyze, says Charles Blahous, one of the two public trustees for the Social Security and Medicare programs.
Under the Simpson-Bowles Social Security plan, there are three obvious categories of winners:
- Low-income workers.
- Fiscal conservatives concerned with the growth of taxpayer burdens.
- Advocates of bipartisan problem-solving.
And, three categories of losers:
- Advocates of a solution based primarily on tax increases.
- Advocates of improving intergenerational equity through funded savings accounts.
- Senior-scaring political opportunists.
From a substantive perspective, Simpson-Bowels would be a simultaneous victory both for progressive advocates for low-income workers and for conservative advocates of restraining the growth of taxpayer burdens. If nothing like Simpson-Bowles is enacted in the near term, the eventual solution will almost certainly do far less to protect both low-income workers as well as taxpayers, says Blahous.
Source: Charles Blahous, "Winners and Losers under the Simpson-Bowles Social Security Plan," Economics for the 21st Century, November 29, 2010.
Browse more articles on Economic Issues