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97 IRET Policy Bulletin 1 (2011)

handle is hein.taxfoundation/iretpbul0056 and id is 1 raw text is: ~May 25, 2011 No. 97 RETIRING WITH FINANCIAL SECURITY AND DIGNITY: SOCIAL SECURITY, THE COMMISSION, AND MARKETS The National Commission on Fiscal Responsibility and Reform Weighs In In December of 2010 President Obama's deficit and debt bipartisan group, The National Commission on Fiscal Responsibility and Reform, released its study on the fiscal health of the United States. In the last paragraph of the preamble the authors suggested that time is running out. After all the talk about debt and deficits, it is long past time for America's leaders to put up or shut up. The era of debt denial is over, and there can be no turning back. We sign our names to this plan because we love our children, our grandchildren, and our country too much not to act while we still have the chance to secure a better future for all our fellow citizens.' In their general attack on deficits and debt they spoke specifically about Social Security, which has a 75-year unfunded liability equal to $6.9 trillion in present value. They said Social Security is far more than just a retirement program-it is the keystone of the American social safety net, and it must be protected. This statement is a bit ambiguous. Does it mean that the goal of Social Security, retirement income broadly speaking, must be protected? Or does it imply that the structure of the system, by which the goal is achieved, must be protected?3 In other words, is it the means or the ends that must be preserved? This paper will attempt to answer that question. It starts with a brief review of Social Security as it presently exists in order to provide a frame of reference for the Commission's proposal. Both the present system and the Commission's suggestions 1 See The National Commission on Fiscal Responsibility and Reform, http ://www.fiscalcormmission.-ov/sites/fiscalcommission.gov/files/documents/TheMomentoffruth12 1 2010.pdf, p. 7. 2 The 2010 Annual Report of The Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, ht2tp://www.ssa.gov/oact/tr/2010/tr2010.pdf, p. 63, Table V.B5, line E, for OASI, future operations omitting trust fund balance. 3 See The National Commission on Fiscal Responsibility and Reform, op. cit., p. 48. Institute for IRET is a non-profit, tax exempt 501(c)3 economic policy research and educational Research organization devoted to informing the public about policies that will promote economic growth and efficient operation of the market economy. on the Economics of 1710 Rhode Island Avenue, N.W., 11th Floor • Washington, D.C. 20036 Taxation (202) 463-1400 • Fax (202) 463-6199 - Internet www.iret.org

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