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![handle is hein.tera/fisporum0004 and id is 1 raw text is: FiSCA
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TAX FOUNDATION, INCORPORATED
At Issue: Social Security
and the Budget
n this issue of Fiscal Policy Forumn,
the budgetary status of the social
security trust funds is examined by Al-
icia H. Munnell, Senior Vice President
and Director of Research for the Federal
Reserve Bank of Boston. She seeks to
clear up some of the confusion arising
from the complicated interaction be-
tween social security and the rest of the
Federal government and from the
changes over time in the budgetary sta-
tus of the social security trust funds.
She argues that the projected un-
precedented buildup of trust fund re-
serves adds a new and compelling
argument for reporting the social secu-
rity trust funds separately.
Ms. Munnell also argues that the date
at which the separation is slated to occur
should be accelerated so that these as-
sets, which are designed to pay for fu-
ture social security benefits as the baby
boom generation retires, do not distort
decisions about social security or the
rest of the budget.
[EDITOR'S NOTE: When Ms. Mun-
nell wrote this article, removal from the
budget was scheduled to occur at the be-
ginning of fiscal year 1993. The Bal-
anced Budget and Emergency Deficit
Control Act of 1985 (Gramm-Rudman-
Hollings) required that social security
be moved off budget immediately. The
old age and survivors and disability in-
surance trust funds (OASDI) are now,
by law, off budget and exempt from any
general budget limitation imposed by
statute. Medicare (HI) remains on
budget.]
While the goal Ms. Munnell espouses
in this thoughtful analysis has been en-
acted into present law, her balanced
treatment of the issue remains cogent
for any discussion of budgetary policy.
In addition to her responsibilities as
Director of the Boston Fed, Ms. Mun-
nell conducts research in the areas of tax
policy, social security, and public and
private pensions. She has written exten-
sively and testified frequently before
Congressional hearings on matters of
tax and retirement income policy.
She earned her doctorate in Econom-
ics from Harvard University and her B.A.
in economics from Wellesley College.
The views expressed in this paper are
those of the author and do not reflect
those of the Federal Reserve Bank of
Boston, the Federal Reserve System or
the 'ax Foundation, Incorporated. An
expanded version of this article ap-
peared in the July/August 1985 issue of
the New England Economic Review.
TAX FOUNDATION, INCORPORATED
One Thomas Circle, N.W., Suite 500
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