DAILY SUMMARY May 28

[National Dialogue Moderator <moderator>]

		DAILY SUMMARY FOR MAY 28, 1999 
		    WOMEN AND MINORITIES


NOTE: This summary covers the discussion of Kolbe/ Stenholm; the
response to Ms. West's next question will be covered in the next
summary.

PANELISTS'S COMMENTS:

JOHN BANKS-BROOKS approves of the Kolbe/Stenholm approach.  He
would like more than a 2% carve out going into individual accounts,
but he strongly favors the combination of voluntary contributions
and tax credits for low-income workers.

ANNA RAPPAPORT had two posts. In the first she responded to Darcy
Olsen's paper, which advocates earnings sharings in private accounts
to allocate more money to the lower earning spouse. On the plus
side she sees such an approach as giving benefits for care-giving
based on a split of marital earnings; it would provide divorced
women with more money. On the minus side, she does not think this
would work well for determining disability benefits or pre- retirement
survivors' benefits; she also sees it as disincentive to marriage.
She thinks the idea needs further study.  In her second post she
approves of Kolbe/Stenholm raising the minimum benefit because she
does not think the present system gives homemakers enough credit
for their care-giving years and while this is not a fix it's a
helpful patch. She also thinks the widow's benefit needs to be
raised and that they should address this as well.

HEIDI HARTMANN had two posts. She approves of some but not all of
the provisions in Kolbe/ Stenholm. She likes the government match
for the savings of low-income workers, which is like President
Clinton's USA accounts. She likes their more generous minimum
benefit, but dislikes its financing. She thinks it is wrong to
raise the benefits calculation to 40 years from 35 years, because
the poor often cannot work that many years due to living in jobless
areas, poor health and family obligations. She likes the provision
allowing low-income workers to divert some of the earned income
tax credit (EITC) benefits into their individual accounts and thinks
the President's plan could be similarly modified.  Overall she
prefers the President's idea of add-on accounts rather than
carve-outs. She doesn't thinks Kolbe/Stenholm will help as many
women as they say and would like SSA to study the issue. She also
suggests that an earnings credit be created for the years spent
raising small children at home.  In a second post Ms. Hartmann
critiques the Cato plan which the Institute for Women's Policy
Research has analyzed. Overall she thinks it's a bad deal for women.
She wonders why anyone would support such a plan given its enormous
transition costs. As she sees it, you will end up paying for two
retirement systems, one for current retirees and the new private
accounts.  She further notes that Ms. Olsen' advocacy of earnings
sharing with a 50-50 split between spouses made privatization look
like a good deal for women, although most of benefits in such a
plan just go to married women. Ms.Hartmann points out that Cato
has now abandoned this approach because of difficulties in
administering such a scheme.

KIOLO KIJAKAZI objects to the financing of Kolbe/Stenholm because
in order to pay for its 2% carve out, the proposal reduces benefits
to women in two ways. First, by reducing the COLA by .33% this
across-the-board benefit cut hurts women more than men because they
live longer.  Secondly by increasing the number of years used to
calculate benefit levels from 35 to 40 Kolbe/Stenholm will reduce
the women's benefits because on average women spend 12 fewer years
in the labor force.  She also criticizes Kobe/Stenholm for
"underprotecting" widows because it does not require married workers
to purchase a joint annuity that pay benefits until both spouses
die.  Finally, she notes that a carve out makes the long-term
imbalances in the trust funds almost twice as larger entailing
future benefit cuts She sees the net effect of these measures as
detrimental to women.


PUBLIC COMMENTS

--Michael Jones views the issues surrounding benefits for widows
and divorcees as getting in the way of reform.  He thinks that the
appropriate issues for reform, retirement benefits, are being held
hostage because politicians are too sensitive to the women's
constituency.

--Carolyn Cox attacks Heidi Hartmann for advocating a new entitlement
in endorsing the President's USA accounts. She objects to funding
these accounts out of general revenues. She wonders how she can
ignore the huge unfunded liabilities of the present system.  She
also criticizes Ms. Hartmann and Ms. Rappaport for treating women
as victims and insists that only by adopting a private account
reform plan can the Social Security system give working women a
fair return on their FICA taxes.

--Walter Hart also suggests that private accounts would be a useful
reform and that he supports means testing, increased progressive
income taxation to support current benefits and bonds to cover the
transition costs.

--Richard Arsinow, another Cato supporter, also attacks Ms. Hartmann
for advocating new benefits and not addressing the financial perils
that the present system faces.  He wonders how she can advocate
retention of the present system when a young working woman will
receive a negative return on her FICA taxes.


Barbara Brandon