A BEJEAP Contributions article.

Abstract

The President's Commission to Strengthen Social Security proposed three plans for reforming Social Security. All of them would create individual accounts financed by diverting funds from the Social Security Trust Fund. One of the three Commission proposals (Model 1) would not restore long-term balance to Social Security. This paper focuses on the other two proposals - Models 2 and 3 - which would restore long-term balance. Models 2 and 3 contain a number of elements and are quite complicated. To understand the plans, we describe their proposed changes to Social Security benefits (which we refer to as "traditional benefits"), the individual accounts that the plans would establish, the combined effect on retirement income from the changes in traditional Social Security benefits and the individual accounts, and the impact on Social Security financing and the rest of the budget.

Submitted: July 30, 2002 · Accepted: September 23, 2002 · Published: October 22, 2002

Originally published in Contributions to Economic Analysis & Policy.

Recommended Citation

Diamond, Peter and Orszag, Peter R. (2002) "An Assessment of the Proposals of the President's Commission to Strengthen Social Security," Contributions to Economic Analysis & Policy: Vol. 1 : Iss. 1, Article 10.
Available at: http://www.bepress.com/bejeap/contributions/vol1/iss1/art10