The Nadler Social Security Plan is the first piece of comprehensive legislation that builds on the President's proposal, but takes an extra step to completely eliminate the projected 2.19% actuarial deficit. According to the Social Security Actuaries, this bill would bring the Social Security system into long-term actuarial balance for at least 75 years, even according to the more pessimistic projections of the 1998 report. Most importantly, it does so without raising the retirement age, without cutting benefits, without shifting the risk onto individuals through individual private accounts funded by FICA taxes, and without raising tax rates.

No Cuts in Benefits. This bill does not raise the retirement age, does not cut benefits, does not shift the risk onto individuals through individual private accounts funded by FICA taxes, and does not raise tax rates.

Surplus Transfer. The bill implements the President's proposal to authorize the transfer of 62 percent of the projected budget surplus to the Social Security Trust Fund for a period of 15 years.

The Independent Social Security Investment Oversight Board. The bill creates the Independent Social Security Investment Oversight Board which is authorized to hire independent, politically insulated investment managers and requires them to invest a small portion of Social Security assets in broad index funds which track the market based on a fixed formula. Many state and local governments invest up to 60% of their assets in the stock market. My bill would authorize half of that amount and would prohibit investing more than 30% of total Trust Fund assets in the market. In order to extend the projected solvency of the Social Security system for 75 years, the bill invests a larger, but still prudent, amount of the Trust Funds in index funds than the President's proposal which extends the projected solvency for 56 years.

Increase, and then index, the cap on taxable wages. Starting in 2000, the bill incrementally increases the cap on taxable wages above the current $72,600. Currently, approximately 86% of all wages are subject to FICA contributions. This has slipped in recent years from the historic 90% due to the dramatic rise in disparity of wages. The Social Security Actuaries inform us that 93% percent of wage earners earn less than the current cap and therefore pay FICA taxes on all of their earnings. About 7% of wage earners do not pay FICA taxes on all of their income. My bill would require the wealthiest 7% to pay the same FICA tax rate on a slightly greater portion of their earnings. It would not eliminate the cap completely. To ensure fairness, these individuals' Social Security benefit levels would increase as well. According to Americans Discuss Social Security, an average of 75% of participants in the organization's nationwide forums indicated support for raising the annual earnings cap.