Saving Social Security: A Balanced Approach

Rating:
Summary: Only Balanced on the High End
Review: First, the good things. This text gives a general understanding of how the 75-year projection has gone from on-balance in 1983 to off-balance in 2003, it provides many examples of possible errors in the system, and it gives good recommendations to the current system to enhance the ability of Social Security to remain in balance once it has been restored, namely things like adjusting retiree benefits for changes in expected life span over and above projected changes and including a universal legacy charge which does not eliminate the legacy cost but, rather, creates a stable legacy cost over time such that the cost of the system is being borne by all rather than only one generation (ours!). These earn the book 4 stars.

The authors state in chapter 3 their five goals for Social Security reform: "restor[e] Social Security to a sound financial footing, reduc[e] the future burden from Social Security on the rest of the Federal Budget, shar[e] the ongoing costs of the program's past generosity in a fair manner, preserv[e] and strenghten the program's social insurnace function,s and ensur[e] that, on balance, the changes enhance the overall performance of the economy." Given that the current 75-year projection by the Office of the Chief Actuary now shows a 1.9% of payroll imbalance, the authors contend that this imbalance should be corrected by not just revenue increases (higher payroll taxes, new estate taxes, or a non-renewal of the 2001 and 2003 tax cuts) or benefit reductions, but both. In fact, this is the type of balance they propose - that all parties should share in the costs of the system equally. This "all parties" mentality leads them to include those state and local government workers currently not covered by the program, but conveniently (or maybe politically correctly) leads them to EXCLUDE all current retirees and near-retirees (those retiring in the next 10 years or so). The "all parties" mentality also belies their obvious disdain for the higher-earning cohorts of the country, in that many of the balance reforms do not balance reductions in benefits across all earnings groups with tax increases across those same groups, but mostly balances the increased revenue from taxing higher-wage earners more with decreasing benefits to those same high-wage earners through incrasing the "progressivity" of benefits. Such inconsistency in comparing apples to apples (for example, continually discussing the 2001 and 2003 tax cuts and options to reinstate those taxes as revenues dedicated to Social Security, when in fact these tax cuts are outside the scope of Social Security, and should have stayed there throughout the whole text) as the authors like to say they are doing causes them to lose 2 stars.

Overall, this book provides both positive analysis and negative inclusion of meaningless comparison. It is good for background to understand what the dilemma is truly about, but their whole package will probably not be, and should not be, implemented, though certain specific parts are appropriate.

Rating:
Summary: A highly recommended ray of hope
Review: Written by the chair of the board of the National Academy of Social Insurance and a former special assistant to the president for economic policy during the Clinton administration, Saving Social Security: A Balanced Approach Proposes a reform plan for America's social security system that would save it from both its financial problems and those who would do away with it. Focusing on means that promote long-term balance and sustainable solvency, while protecting the program's benefits for the disabled, low earners, widows, and young survivors. Exhaustively researched and deeply entrenched in practical issues and mathematical calculations, Saving Social Security is a highly recommended ray of hope against a looming national crisis.