Download A Well-Tailored Safety Net: The Only Fair and Sensible Way by Jed Graham PDF

By Jed Graham

This interesting booklet introduces the 1st Social protection reform notion adapted to fulfill the nation's monetary demanding situations and take care of an getting older population.

• greater than 50 charts and tables element the controversy over Social protection reform, together with the money advantages retirees might get below a variety of proposals

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Additional info for A Well-Tailored Safety Net: The Only Fair and Sensible Way to Save Social Security

Example text

There are several reasons why this argument is counterproductive, if not disingenuous. Consider first that a number of Democratic policy makers have proposed devoting estate tax revenues to Social Security. While this would leave a hole in the rest of the budget, they argue that it makes sense because Congress would be less likely to abolish the estate tax if it is dedicated to a popular program like Social Security. The takeaway is that the political hurdles to tax increases are more surmountable in the context of saving Social Security than in the context of deficit reduction.

In other words, given the bigger budget strains outside of Social Security, it can be expected that trustfund financed benefits would simply be paid for with debt. 2 trillion in unfunded benefits from 2016 through 2036—just before the trust fund runs out. 14 In this present-law scenario, the ongoing interest payments on this debt from 2037 and beyond would soak up a bigger portion of the budget than it would take to close Social Security’s official shortfall with additional tax revenue. 9 percent of GDP.

When a budget surplus of $70 billion unexpectedly emerged in 1998—the first surplus since 1969—both Democrats and Republicans were quick to celebrate and claim credit. But if Congress hadn’t counted the Social Security surplus as part of the budget, there would have been a $30 billion deficit. 7 As top Clinton administration economists noted in their retrospective analysis of fiscal policy during the 1990s, ‘‘taking Social Security out of the budget . . ’’8 If not for the extra funds flowing to the Social Security Trust Fund, the $126 billion surplus in 1999 would have been a paltry $1 billion surplus.

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