About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

Letter from Douglas Holtz-Eakin, Director Congressional Budget Office to Max Baucus regarding H.R. 3304, the Growing Real Ownership for Workers Act of 2005 1 (September 2005)

handle is hein.congrec/cbo10189 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Douglas Holtz-Eakin, Director U.S. Congress Washington, DC 20515 September 13, 2005 Honorable Max Baucus Ranking Member Committee on Finance United States Senate Washington, DC 20510 Dear Senator: As requested in your letter of August 11, 2005, the Congressional Budget Office has analyzed H.R. 3304, the Growing Real Ownership for Workers Act of 2005, as introduced on July 14, 2005. The legislation would have three main effects: * It would create individual accounts (called GROW accounts) and reduce traditional Social Security benefits for account holders; the net impact on total retirement benefits would depend on whether an account earned more or less than the Treasury rate of return. * H.R. 3304 also would defer the exhaustion of the Social Security trust funds, permitting some cohorts to receive greater benefits and raising federal outlays in the future. * Finally, from 2007 through 2020, the contribution of general funds to individual accounts would raise federal outlays and the unified deficit. In 2007 and all later years, federal debt in the hands of the public would be higher than under current law. Under the bill, general funds equivalent to the cash surplus in the Old-Age, Survivors, and Disability Insurance (OASDI) program would be distributed each year into an interim fund, and the following year they would be distributed into individual GROW accounts for workers covered by Social Security. CBO projects that from 2007 through 2021, the transfer of funds to GROW accounts would increase federal outlays by more than $1 trillion. Account holders could draw from the accounts during retirement, but Social Security retirement benefits for those individuals would be reduced, or offset, by an amount based on the size of the deposits made to the accounts. In general, the withdrawals from the accounts would replace only a portion of Social Security benefits. Before trust fund exhaustion, if returns on the GROW accounts were higher than the returns on Treasury bonds, total retirement benefits would be higher than those currently scheduled, and if returns were lower, total benefits would be lower.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most