PRIVATE SECURITY

August 5, 1998
		In 2013 Social Security taxes will no longer be able to sustain benefits for retired Baby Boomers. One possible alternative to such a failure would be to privatize social security. Experts answer your questions.

Is Social Security really in crisis? Is privatization the only alternative to raising taxes? What are the risks in privatization? What are the benefits of privatization? Where is all of the money already collected?   Aug. 5, 1998: How should Social Security be reformed? April 7, 1998: The state of Social Security. Jan. 13, 1997: Reforming Social Security Dec. 5, 1996: A Dialogue with Pete Peterson Browse the NewsHour's Health Spotlight. Social Security Administration The American Enterprise Institute The Brookings Institute White House Conference on Social Security An estimate of your social security benefits.

President Clinton initiated a national debate last year when he challenged members of Congress to "Save Social Security first" and has continued to push for such reform. Since then, there have been numerous drafts of ways to stabilize the program, which will no longer support itself in 2013. Proposals being discussed include, raising the eligibility age, increasing the Social Security payroll tax or some form of privatization, which would allow individuals to invest their social security in the stockmarket. Although privatization has its strongest support amongst Republican Congressmen, two senior ranking Democrats also embraced the idea. Senators Daniel Patrick Moynihan (D-NY) and Robert Kerrey (D-NE) have introduced "The Social Security Solvency Act of 1998," which would cut the Social Security payroll tax by 2 percent and allow workers to invest the tax cut in personal savings accounts. The idea of privatizing Social Security set off a major debate. Henry Aaron, senior fellow at the Brookings Institution, stated that allowing Americans to play "financial roulette with part of their core [economic] protection would undermine" Social Security's purpose -- ensuring a reliable income for America's retirees. But Carolyn Weaver, resident scholar at American Enterprise and proponent of privatization, contends "it's no longer a question of whether we will have private investment accounts in the years ahead for all Americans to replace a portion of Social Security, but just how quickly we'll get to that point." Answering your questions are Henry Aaron, senior fellow at the Brookings Institution and Carolyn Weaver, resident scholar at the American Enterprise Institute and director of AEI's Social Security and Pension Project.