Assessing the Plans Proposed by the President's Commission to Strengthen Social Security
Posted: 26 Jul 2002
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 analysis focuses on the other two proposals - Models 2 and 3 - that would restore long-term balance. Models 2 and 3 contain a number of elements and are quite complicated. To understand the plans, the authors describe their overall financing first and then examine their proposed changes to Social Security benefits (which they refer to as traditional benefits), the individual accounts that the plans would establish, and the combined effect on retirement income from the changes in traditional Social Security benefits and the individual accounts.
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