RE: Explain Social Security plans

[National Dialogue Moderator <moderator>]

Answer:

	We support using general revenues to help finance Social
Security.  General revenues are a progressive source of financing that
can be used in a responsible way to strengthen the system.

	Bob is right that the President's plan and the plan recently put
forward by Representatives Archer (R-TX) and Shaw (R-FL) both use
general revenues.  There is, however, a fundamental difference between
the two.  

	The Archer-Shaw proposal uses general fund revenues to finance
expensive individual accounts in place of Social Security for as far
into the future as 2053 (maybe longer if those projections don't pan
out).  That means that if unified budget surpluses disappear before then
(and they are projected to do so well before that time since Congress
has committed the overwhelming majority of on-budget surpluses to pay
for tax cuts), then the program cuts or tax increases that Bob mentions
or deficit spending will have to occur in order to fully fund the
Archer-Shaw individual accounts.

	The President's plan, by contrast, transfers 62% of surpluses to
the Social Security trust funds over a 15-year period when sufficient
surpluses are expected to be available.  This would be done in a way
that yields a very substantial reduction in debt held by the public. 
This in turn greatly improves the position of the government to meet the
future needs not only of Social Security but also other programs because
the debt reduction should lead to lower interest rates and lower
interest costs for the government.  The Archer-Shaw plan does not have
this effect.

Gerry Shea
AFL-CIO