• Social Security Primer

      March 27, 2011 at 7:00 am
      Don Taylor

    The Committee for a Responsible Federal Budget has a nice overview of the two ways that Social Security is viewed (off budget v. unified budget).  There is often so much energy spent arguing over which is the best way to view the program it deflects from reform discussions. The linked document is persuasive that it doesn’t matter which way you view it, reform is needed and the sooner we start the more options we will have.

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      Economics
      Social Security

    • by Don Levit on March 28th, 2011 at 13:05

      Don:
      These 2 perspectives are known as the trust fund perspoective and the budget perspective.
      If you woulkd like to contact me directly, I could provide some excerpts you may be interested in, from good third party sources, such as the Treasury.
      Or, would it be appropriate to do so on this blog?
      Don Levit

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    • by Don Levit on March 29th, 2011 at 10:22

      These 2 perspectives are illustrated well on Medicare Part D.
      The trust fund perspective is always fully funded for it is assumed the Treasury will make good on all the trust fund “assets.”
      In part D of Medicare, payments are 25% funded by participants and 75% by the federal government. There isn’t much of a trust fund needed, for the program is pay-as-you-go. Nevertheless, from the trust fund perspective, the benefits are fully funded. This is because it is assumed the Treasury will make good on their 75% (as well as the 25% for prticipants).
      The budget perspective also makes that assumption, but accounts for it financially, in the budget. The 75% of general revenuies is an immediate expenses, and is reflected in the budget, thus increasing the deficits.
      In the case of part D, I believe, the budget perspective is more objective and realistic.
      Don Levit

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