DAILY SUMMARY April 30

[National Dialogue Moderator <moderator>]

		DAILY SUMMARY FOR APRIL 30, 1999
		      DISCUSSION ON VALUES


Many of you chose to respond to the moderator's April 27th suggestion
that you discuss the nine principles underlying the existing social
security system as outlined by Robert Ball, a former Commissioner.
I have summarized the debate on these points below.

Principles 1 & 9 (universal coverage and compulsory participation):

   These two components of the system are interlinked. The privatizers
   challenged these principles because they believe the system
   should be not be compulsory and think that those Americans who
   desire to do so should have the freedom to opt out of the system.
   At the extreme, some members of this group object to funding
   any type of social welfare or safety net programs.  The other
   strong thread was that everyone should be included in the system,
   especially those governmental workers who are not presently
   covered by the system. at the federal level there was a criticism
   of those who double dip into two or more governmentally supported
   pension programs.

Principles 2, 3 & 7 (benefits are both an entitlement and wage
related):

   There was a general consensus supporting these principles, except
   from those Generation X members who do not believe that social
   security will be there for them when they retire.

Principle 4 (system is self-financed with contributions from wages
retained in the trust fund):

   Three separate critiques of this principle were offered. Several
   participants view the present funding of retirement system with
   a wage tax as too regressive and argue that all sources of income
   should be taxed to finance the retirement of the nation's elderly.
   A second critique focused on the system's failure to have one's
   individual contributions fund one's own retirement benefits.
   Finally many object to Congress' violation of this principle by
   using the monies in the trust fund to mask the budget deficit.


Principle 5 (the benefit formula is redistributive paying lower
income workers a higher percentage of pre-retirement earnings):
   
   There is a sharp split of opinion over this principle. Many
   believe that any reform proposal must incorporate such an element
   to be fair. As one participant put it, "(g)iven the wide
   disparities in income, it is essential that society provide a
   firm floor in income for the elderly and [the disabled.]" The
   contrary was also vigorously asserted. As one contributor put
   it, "every person has a right to expect comparable benefits for
   comparable contributions."

Principle 6 (benefits are not means tested):

   This principle also sparked a lively debate. Many participants
   in the dialogue have advocated means testing the benefits of
   wealthier seniors to solve intergenerational equity problems.
   These participants point out that many of the affluent retired
   are receiving far more in benefits than they paid in and that
   it is unjust for today's low-income workers to finance such
   benefits under a regressive payroll tax.  Those who oppose means
   testing argue that it is unfair because their benefits should
   reflect the contributions they paid in.  Another participant,
   who recognizes that today's recipients are making out better
   under social security than future generations will, sees this
   as the WW II generation's due for the legacy of peace and
   prosperity that they produced.

Principle 8 (Cost of Living Increases or COLAS):

   Most participants endorsed this aspect of the system, although
   one participant views the present formula as overstating inflation.


Barbara Brandon