Saving Social Security: A Balanced Approach

FROM THE PUBLISHER

While everyone agrees that Social Security is a vital and necessary government program, there have been widely divergent plans for reforming it. Peter A. Diamond and Peter R. Orszag, two of the nation's foremost economists, propose a reform plan that would rescue the program both from its projected financial problems and from those who would destroy the program in order to save it.

Saving Social Security's strategy balances benefit and revenue adjustments, following the precedent set by the last major Social Security reform in the early 1980s. The authors' proposal restores long-term balance and sustainable solvency to the program without imposing additional burdens on the rest of the budget. Further, it protects disability and young survivor benefits and strengthens Social Security's protections for low earners and widows. Most important, the plan preserves the program's core social insurance role by providing a base-level of assured income to American workers and their families in time of need.

To better understand the accomplishments and financial problems of Social Security, Diamond and Orszag provide background on the program, as well as on the causes of the long-term deficit. They suggest ways in which various alternative reform plans should be evaluated and explain the shortcomings of proposals to replace part of Social Security with individual accounts. Saving Social Security is essential reading for policymakers involved in reform, analysts, students, and all those interested in the fate of this safeguard of American lives.

About the Authors:
Peter A. Diamond is an Institute Professor at the Massachusetts Institute of Technology. He has been president and chair of the board of the National Academy of Social Insurance. His recent books include Social Security Reform, The 1999 Lindahl Lectures (Oxford University Press, 2002) and Taxation, Incomplete Markets, and Social Security: The 2000 Munich Lectures(MIT Press, 2002).

Peter R. Orszag is the Joseph A. Pechman Senior Fellow in Economic Studies at the Brookings Institution and a codirector of the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution. He previously served as special assistant to the president for economic policy during the Clinton administration.

SYNOPSIS

Diamond (Massachusetts Institute of Technology) and Orszag (Brookings Institution) present a proposal for reforming Social Security that balances benefit reductions with revenue enhancements. Following the precedent set by the last major reform in the early 1980s, the plan seeks to restore long-term solvency to the program without imposing additional burdens on the rest of the budget. The authors also identify the causes of the long-term deficit and explain the shortcomings of proposals to replace part of Social Security with individual accounts. Annotation ©2004 Book News, Inc., Portland, OR

WHAT PEOPLE ARE SAYING

This book should be read by all of those interested in the future of Social Security.(Secretary of the Treasury, 1999-2001) — Lawrence H. Summers

When members of Congress get serious about fixing Social Security, they should begin by reading this book, instead of appointing another commission. (Justus S. Hotchkiss Professor of Law, Yale Law School ) — Michael J. Graetz