the commission will go on to serve as the basis of legislative proposals to be discussed in the newCongress
1. When you say "social security should not be privatized," most people understand that to meanindividual accounts and private management. But if the government (i.e. the Social Security Administration) were to gradually invest 15-20% of the SSI trust fund in the stock market, would your coalition be against it? Many countries' public pension systems invest part of the money in the stock market.
There is opposition to this idea by persons believing that government should not invest trust fund assetsin private equities. However, we like you, think that serious consideration should be given todiversifying trust fund investments and agree that this is very different than establishing “personal” or “private accounts.” Gradual and modest diversification would in all likelihood result in greater returnsto the trust funds. Also, because government would bear the risk, individuals would not be impacted by market fluctuations.
2. I agree with the idea of not means-testing social security, but what is the coalition's position on theidea of linking benefit increases for wealthier recipients to a price index while keeping lower incomebeneficiaries' increases tied to a wage index, as they are now?
The coalition does view “Progressive Price Indexing” as a large benefit cut, falling most heavily onyounger workers and those that follow. Over time, it would also radically alter the structure of Social Security and undermine support for Social Security as everyone would eventually receiveroughly the same low benefit. In short
There’s nothing “progressive” about the “Progressive Price Indexing” (PPI) that PresidentBush proposed and now Congressman Paul Ryan and others propose to fund their privatization schemes. PPI drastically cuts the benefits of everyone earning over $25,000,maintaining current-law benefits only for the very lowest wage earners.
PPI proposals cut the benefits of youngest workers the most because the impact iscumulative. Under the plan proposed during the Bust privatization effort, a worker whoearned the average wage throughout his or her career and retired in 2040 would receive a benefit 24 percent lower than under the current benefit formula. If the worker retired in 2070,his or her benefit would be 43 percent lower than the benefit the worker would receive under current law.
PPI radically alters Social Security into a program where benefits are increasinglyunconnected to wages and contributions. Rather everyone eventually gets the same low benefit, unrelated to wages, similar to what welfare programs provide.
PPI raises only $3 billion in 2025, but over time it fundamentally alters the nature of SocialSecurity by undermining what the program is designed to do – provide a reasonable level of insurance protection against loss of wages.