RE: Social Security Roundtable

[National Dialogue Moderator <moderator>]

Gerry Shea's response to Bob Rosenblatt's opening question:


	Some might question whether reform steps should be taken now. 
We believe that this Congress has the responsibility to act soon for two
important reasons.  First, many Americans doubt whether Social Security
will be there for them, and they need to be assured that it will. 
Second, the Social Security actuaries are projecting a shortfall in
several decades time, and the sooner we act the more modest the steps
needed to achieve solvency will be.  

	Any steps that Congress takes should be aimed at strengthening
and protecting the core defined benefits that Social Security now
provides to retired and disabled workers and their survivors.  There are
at least two pieces that should be included in any reform package:
contribution of unified budget surpluses to Social Security and an
increased payroll tax contributions cap.  Each of these could be done in
combination to eliminate the entire projected shortfall.

	As a first step, Congress should commit to appropriating a
significant portion of unified budget surpluses for Social Security. 
The President, for example, has proposed contributing roughly 62 percent
of total unified budget surpluses over the next 15 years (about $2.8
trillion) to the Social Security trust funds.  The Social Security
actuaries (the staff experts at the Social Security Administration who
are projecting the system's revenue shortfall beginning in 2034) have
said that this step alone would extend the date until which Social
Security can pay full benefits from 2034 until 2052.  

	Increasing the payroll tax contribution cap would also extend
the date through which the system can pay full benefits.  Today, workers
and their employers pay the payroll tax only on the first $72,600 of a
worker's earnings.  This means that more than 94 percent of workers make
tax contributions on their full earnings, but the highest earning 6
percent do not.  Raising the cap specifically asks the fewer than 6
percent of workers making more than $72,600 to help assure the system's
solvency.