A commission including members of Congress from both parties will propose a sweeping plan today to shore up Social Security, calling for the establishment of personal investment accounts and a gradual increase in the retirement age to 70.
The report is the most comprehensive package of recommendations for remaking Social Security in preparation for the baby boom generation's retirement. It says the changes would keep Social Security solvent for at least 75 years without raising taxes, even as it trades some reductions in guaranteed benefits for the higher, if less certain, returns of the financial markets.
Prepared after 15 months of study by the National Commission on Retirement Policy, a private group of lawmakers, economists, pension-system experts and business executives that was assembled by the Center for Strategic and International Studies, the report is likely to wield considerable influence at the White House and on Capitol Hill as Democrats and Republicans seek solutions to one of the most politically sensitive issues facing the nation.
While the committee's main recommendations are sure to be hotly debated, the report underscores the speed with which once-radical options for Social Security, like the addition of an investment component, have become part of the political mainstream.
Powerful interest groups, including the American Association of Retired Persons, oppose creating private accounts within the Social Security system, as do many liberal Democrats.
While the congressional Democrats and Republicans on the commission backed the investment-oriented approach, the panel had no members drawn from labor unions or other groups that have fought to maintain Social Security as a guaranteed safety net against poverty and old age.
But with the stock market booming and many people more comfortable than even a few years ago with investing on their own, Democrats, including Sens. Daniel Patrick Moynihan of New York and Bob Kerrey of Nebraska, have joined many Republicans in backing private accounts.
"This report brought together people who really understand the issue," said Sen. Judd Gregg of New Hampshire, a Republican and a co-chairman of the commission. "It's bipartisan. It's the only plan out there scored by Social Security's actuaries as saving the system for the next century. And it says it can be done without raising taxes or significantly impacting people in a negative way."
The retirement age, which is already scheduled to rise to 67 from 65 over the next few decades, would rise under the commission's plan to 70 by 2029. The early retirement age would rise to 65 from 62 by 2017.
Pub Date: 5/19/98