Keeping Social Security Strong - H.R. 1043

[National Dialogue Moderator <moderator>]

	    Keeping Social Security Strong  - H.R. 1043


My number one priority in drafting this legislation was to prove that it is
possible to make Social Security solvent for seventy five years without
raising the retirement age, without cutting benefits, without shifting the
risk to individuals through private accounts, and without raising tax rates.


This plan also does not adjust the CPI, does not force all new state and
local government employees into Social Security, does not increase the
benefit computation period above 35 years, and does not cut benefits by
adjusting the bend points.

It has been scored by the Social Security Actuaries to completely eliminate
the long-range OASDI actuarial deficit.  

This plan maintains the guaranteed, life-long, cost-of-living-adjusted,
defined benefit plan. That is the heart and soul of Social Security, and
that is why I have fought so hard to preserve this vital program.
			 
A full description of the Nadler proposal can be found at
http://www.network-democracy.org/social-security/nd/rt/nadler_paper.html  

I have also described portions of the bill in previous messages posted
during this forum.

Essentially, the bill transfers 62 percent of the projected budget surplus
to the Social Security Trust Fund for a period of 15 years, invests a
portion of the funds in broad stock index funds, and raises the wage cap
above the current $72,600. 

Keep in mind this plan makes the system solvent even under the Actuaries
extremely pessimistic intermediate assumptions.  Many of their predictions
are questionable especially the fact that they predict economic growth to
average 2.0 for the years 2000-2007, despite economic growth of 3.4 percent
in 1996, 3.9 percent in 1997, and 3.9 percent in 1998.  They then predict
economic growth to take a significant downturn to average 1.4 from 2020-2040
and 1.3 percent in 2050-2070.  They further predict that the economy will do
even worse after that.  To put these numbers in some perspective the
economic growth rate was 4.6 percent from 1960-64, 5.4 percent in 1976, 7.0
percent in 1984.  So H.R. 1043 restores solvency even in light of these
extremely pessimistic predictions.  If the Actuaries are wrong, and the
economy does better than predicted, Social Security will be in even better
shape.

 
Thank you.  I look forward to your questions.

Representative Jerrold Nadler