Multiple Options for Social Security Privatization
November 16, 2001
Rather than recommending a single set plan for establishing private retirement accounts, President Bush's Social Security reform commission is working on a list of up to five options it will present in its final report, due by Dec. 21. Observers see the move as part of a political strategy: rather than one take-it-or-leave-it plan, the options will help spark a national debate -- making privatization more difficult for opponents to defeat.
- One option will propose more regulated, "fairly small accounts" that would include restrictions on the growth in Social Security benefits.
- Another will not require reducing Social Security benefits -- but would have slightly higher transition costs.
- Different private account sizes will probably be proposed -- ranging from 2 percentage points of income in one to 5 percentage points in another.
- At least one of the options will allow workers at different income levels to put different proportions of their incomes into their investment plan.
"All of the options being considered are consistent with the reform principles that the president has laid down," a commission official says.
The commission plans to hold two more public meetings, on Nov. 29 and Dec. 11, after which it will begin finalizing its recommendations.
Source: Donald Lambro, "Options Expanded for Social Security," Washington Times, November 16, 2001.
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