NEW YORK TIMES' SOCIAL SECURITY PLAN COMES UP SHORT
October 15, 2004
The New York Times has recently issued a proposal to reform Social Security. The plan would address the ailing program's $11 trillion debt primarily through a mixture of tax increases and benefit cuts.
The National Center for Policy Analysis (NCPA), however, finds that the Times' plan comes up short in three important areas:
- Any additional dollars collected under the plan would be put into a trust fund, where it will be borrowed and spent on other programs; when the money is actually needed, it will have to be raised again to pay back the trust fund's bonds.
- The tax increases and benefit cuts fall disproportionately (and unnecessarily) on younger workers and future generations; these individuals also receive no new benefits under the current proposal.
- The Times' proposal only addresses part of the long-term debt of the system because it uses a 75-year projection, which ignores the continually rising costs thereafter.
In addition, the Times' plan assumes the bonds in the trust fund are available to pay some of the long-term costs even though it is unknown where the extra $3 trillion needed to redeem those bonds will come from. The Times ignores this cost in its analysis, says the NCPA.
Source: "Fast Facts about Social Security," National Center for Policy Analysis, October 7, 2004.
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