FIXING SOCIAL SECURITY

February 2005
		President Bush has launched a national campaign to generate support for his plans to reshape Social Security, including the controversial option of personal investment accounts for younger workers. Peter Orszag, senior fellow in economic studies at the Brookings Institution, and Michael Tanner, director of health and welfare studies at the Cato Institute, answer your questions about the voluntary personal accounts and other aspects of the president's plan. Special Report: Social Security Reform

Forum Introduction What are President Bush's plans for Social Security disability? Didn't Great Britain undertake the personal accounts experiment with their version of Social Security to detrimental results? How do the personal accounts affect employers' contributions to Social Security? How would removing the $90,000 income limit on Social Security taxes affect the system's future? What happens if a person's private account runs out? How will the average person who knows nothing about investing fare under President Bush's new plan? How does the federal Thrift Savings Plan differ from Social Security? Under the personal accounts proposal, will there be fees for investing, and who and how will they be paid? If the IOUs in the Social Security trust fund were paid, would the system remain solvent for a much longer time? Why would anyone want to change Social Security, an insurance program, into a savings account? I'm 48, how drastic are my benefit cuts going to be?	Jesse Smith of Albuquerque, N.M., asks: I've heard nothing about Social Security disability. What are Bush's plans for Social Security disability? Peter Orszag responds: The solvency projections already assume that the general fund will make good on the bonds held by the Social Security trust fund. Michael Tanner responds: If all the bonds in the Trust Fund were repaid, Social Security would remain solvent until 2042. However, the government can only get money to repay these bonds by raising taxes, borrowing it, or reducing other government spending. The value of the Trust Fund bonds today is about $1.5 trillion.

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