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Lawmakers and experts have agreed that the government needs to reform
Social Security to avert a potential long-term deficit in the program.
According to the most recent projections, around 2013 taxes paid into
Social Security will no longer cover the cost of checks being paid out.
At this point, the agency will have to draw on government IOU's to pay
benefits. Around 2032, once Social Security has drawn on its entire
stock of these reserves, annual taxes paid into the program may only
be sufficient to pay 72 cents of every dollar of benefits.
At a recent conference on Social Security at the White House, experts
and politicians addressed the need to change the program. The options:
raising payroll taxes; cutting the projected growth of benefits; raising
the rate of return earned on Social Security funds; or some combination
of these.
Raising the rate of return, lawmakers and experts agree, is the least
painful option. In addition, many, reformers would like to see something
more "like a conventional pension program where you collect money
in advance, invest it, and reserve it for the future," explained
Susan
Dentzer, Health correspondent for the NewsHour with Jim Lehrer.
One popular option would be to allow people to invest a portion of
their Social Security contributions in their own accounts, much like
a 401(k) or an Individual Retirement Account (IRA). Others suggest the
government should invest a portion of Social Security's reserves in
stocks to get a better rate of return.
What are the most viable options for reform? How can there be a
higher rate of return without risking too much? Are there some options
that would be better for one population over another?
Rudolph Penner, Senior Fellow at the Urban Institute, Dean Baker,
Senior Research Fellow at the Preamble Center and the Century Foundation
and Michael Tanner and Darcy Olsen at the CATO Institute, answer your
questions.
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