On Friday, June 13, 2003, Empower America co-director Jack Kemp will speak at a press conference at the National Press Club in Washington, DC on the occasion of the publication of a new study on Social Security by Peter Ferrara sponsored by the Institute for Policy Innovation (IPI). Also attending will be Dorcas Hardy, former Commissioner of Social Security, Steve Moore, President of the Club for Growth and Charlie Jarvis, President of the United Seniors Association.
When: Friday, June 13, 2003 (10:00 a.m.)
Where: National Press Club (Edward R. Murrow Room)
Ferrara’s study illustrates that allowing workers to place five to six percentage points of their payroll taxes into personal retirement accounts can eliminate the unfunded Social Security liability that threatens to bankrupt the system in the next 40 years. The study also explains the fatal flaw of attempting to “reform” the current Social Security system by establishing small “two-percentage-point” personal accounts, which would not eliminate the projected Social Security deficit and would require benefit reductions, increases in the retirement age and future tax increases to prevent insolvency.
Ferrara demonstrates how the transition costs of switching from the current pay-as-you-go system to a fully funded personal-accounts system can be bond financed—eliminating any need to raise taxes or cut future retirement benefits—without placing any undue fiscal burden on the Treasury. (This finding follows on an earlier IPI study, “Who’s Afraid of the National Debt,” co-authored by Empower America chief economist Lawrence Hunter and Steven Conover, that analyzed the benefits of borrowing the transition costs involved in switching to a fully-funded personal accounts system.)
The Ferrara study also demonstrates how it is possible to make a fully funded personal accounts retirement system “progressive” by giving low-income workers the ability to place a larger share of their payroll taxes into personal accounts.