A Mountain Too Far? The Saga of Social Security Personal Accounts

Sheila Bair ()
Additional contact information
Sheila Bair: Isenberg School of Management, University of Massachusetts, 121 Presidents Drive, no 320, Amherst, MA 01003, U.S.A.

The Geneva Papers on Risk and Insurance - Issues and Practice, 2005, vol. 30, issue 4, 592 pages

Abstract: As a pay-as-you-go system, Social Security faces severe long-term financing challenges stemming from a rapidly growing retirement population, continued low fertility rates, and increased longevity. Unfortunately, the political debate in the U.S. over how to “fix” Social Security has become polarized. Republicans, led by the Bush Administration, have argued for partial advance funding of Social Security through the establishment of voluntary personal accounts and a scaling back of the index formula used to establish initial benefits for higher income workers. Democrats have vigorously attacked personal account proposals as attempts to “privatize” Social Security. After reviewing historical consideration of personal accounts and the current debate over them, the paper concludes that personal accounts funded through the diversion of payroll taxes supporting traditional benefits are not politically viable and are impeding bipartisan discussions over ways to address Social Security's solvency. The paper endorses a strategy proposed by Senator Robert Bennett (R-Utah) to engage in negotiations with Democrats over solvency measures separately from consideration of personal accounts. The Geneva Papers (2005) 30, 581–592. doi:10.1057/palgrave.gpp.2510055

Date: 2005
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.palgrave-journals.com/gpp/journal/v30/n4/pdf/2510055a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/gpp/journal/v30/n4/full/2510055a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:30:y:2005:i:4:p:581-592

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41288/PS2

Access Statistics for this article

The Geneva Papers on Risk and Insurance - Issues and Practice is currently edited by Christophe Courbage

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan, The Geneva Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().