Volume 6, Issue 1
Rebecca E. Perrine Wade
The Social Security program was created in 1935. This program was developed to provide social insurance to retirees, surviving spouses, and disabled persons. For more than sixty years it has enabled Americans to retire with dignity. However, an unprecedented number of retirees will soon be participating in this program, which will threaten the very existence of the Social Security program. In 1994, the Secretary of Health and Human Services appointed a Social Security Advisory Council to evaluate this situation and propose a solution. The Council recently proposed three different reform plans. The plans range from conservative modifications to radical changes, and all three entail some form of investing in the private sector. Congress has yet to choose the plan that will reform Social Security. In this note, Ms. Rebecca Wade provides a detailed analysis of each reform plan. She discusses the economic and social impact of each proposal and considers how each plan could affect current and future retirees. She reveals that some elements of the proposed plans might sacrifice dignity and security in retirement for the potential economic yield of investments. Ms. Wade urges that policy makers choose the plan that best protects the original public policy concerns behind Social Security.