Are Individual Social Security Accounts Feasible

National Health Expenditures Top $1 Trillion Dollars forSecond Year in 1997

March 1999, Vol. 20, No. 3
Paperback, 16 pp.
PDF, 78 kb
Employee Benefit Research Institute, 1999

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Executive Summary

Are Individual Social Security Accounts Feasible—President
Clinton's State of the Union proposal for “Universal Savings
Accounts” dramatically increased the visibility and role of
individual accounts in the current debate over Social Security
reform. A similar version of the president's USA accounts was
introduced in Congress almost simultaneously by Sen. William Roth
(R-DE), chairman of the Senate Finance Committee, which has
jurisdiction over Social Security issues.

While both proposals would fund the accounts with general
revenues—and not payroll taxes—they make the question of
“how” to implement universal individual accounts (IAs)
all the more important.

Nearly 300 leaders representing the private sector, the public
sector, and the news media explored this issue in detail at the
Employee Benefit Research Institute's (EBRI) Dec. 2, 1998, policy
forum: “Beyond Ideology: Are Individual Social Security
Accounts Feasible?” organized by the EBRI Education and
Research Fund (EBRI-ERF). In keeping with EBRI's nonpartisan and
nonadvocacy role, the policy forum included a wide range of
speakers for, against, and neutral on IAs. A book that includes
comments and papers delivered at the policy forum is being
published by EBRI-ERF this month.

National Health Expenditures Top $1 Trillion Dollars for
Second Year in 1997
—National health expenditures reached a
record high of more than $1 trillion in 1997, but at the same
time the rate of growth (4.8 percent) was the slowest recorded in
more than 35 years, according to data recently released by the
Health Care Financing Administration (HCFA). The average annual
growth rate of national health expenditures has been slowing for
a number of years. From 1980 to 1990, it was 11.0 percent; from
1990 to 1994, it was 7.9 percent; from 1994 to 1995, 4.9 percent;
and from 1996 and 1997, 4.8 percent. National health expenditures
as a percentage of gross domestic product (GDP) have basically
remained unchanged since 1994 (13.5 percent in 1997). By
contrast, from 1960 to 1994, health spending as a percentage of
GDP rose from 5.1 percent to 13.6 percent. Average per capita
national health spending reached $3,925 in 1997, up from $3,781
in 1996. This represented a dramatic increase from 1960, the year
the national health expenditure data series began, when health
spending averaged $141 per person ($765 in 1997 dollars).