T-II 15 18 p_ 8 214 i0 7 222 9 13 1 42Ii 30 61512 6 23 17 FIGURE 1 described the way to byresolve the following the Socialsimple Security forTABLE mula: financing 12/ problem. But in evaluations attacked change the fashi inoin nbenefits atha coordinated t many was federal calculated. media worker campaign. s Table believe 2 shows (i.e., the emplo results yee cof ontthese ributions implemented, tCommission thei THE he r retirement LONG-RUN short-ter permitting (2)onClosed mthe DEFICIT Social agepo proposals. rCSRS dispr co timpared oSecu n oporCosts rtionately ity of wi the The th= Reform elderly's benefits the implications distribu that large(old) pwa toirpulati obenefi rant n ofplus otnsthe under further refunds to long-term receithe ving consideration. ominus ptiopen ns funding sionfor and deficit The IRA salaries gaps in benefits. "Double The belowStevens _10,000, dipping" These bill whereas would suggests gaps arise require only receiving be 7cause percent coverage many dualofofco ofthe mnewly pensation thefederally alterna hired tor ive worke employed benefits rspensi and on men based levels The uncertainty through a omfodification the extent ooff the changes benefitin the formula. economy, productivity, now is a new set of normative options, all of which somewhat change the course Future Average Family Social Security Benefits workers who migrate between employee uninsured contributions. and insured of specific FEDERAL recommendations AGENCY ANDby GENERAL the National REVENUE CommEXPENDITUR ission Ethe PROJECTIONS story was much plus a matching There (i) CSRS areagency Budgetary three contribution principal Cost = reasons benefits plus trust gene plus rallyfund refunds cited interest) minus for extending the fund would Social be provisions annuities modifying did. cannot calculations Conversely, be will the expected forfor benefit taxing be all only significantly to individuals benefits conputation, instill 8 percentpublic at would higher Age of instems the the 65 confidence introduce than Federally cohort from is later cof authat rrently "notch" workers employed retirement the the National such aged women case. that age twenty-five had Commission eligibility inFigu salaries certain re 2to on systems offer incentives employment Historically, do not provide forandcuSocial raccu disability rent mulate workers Security only and topolicy survivor small move ea to has rnings benefits the attempted newin comparable system. to balance Thetosavings those the on birthrates, one period The adjust life of ment service. expectancy, to the Forand benefit people a hostcalculation whoofwork otherin factors proced noncovered ure suggests considered employment, that here, Congress there from the accumulation of past decisions. It is possible that if Congress were FOR THE CURRENT CIVILemployee SERVICE contributions. RETIREMENT SYSTEM AND Mr. chairman, I am pleased to appear before you today to discuss the insure (3) New d employment, CSRS Costs i=/ benefits (new) plus refunds minus In 1982 Dollars different. On MODIFIED moving SYSTEM the 1985IN CONJUNCTION scheduled payroll WITH NEWLY tax increase HIRED WORKERS to 1984, 39 Security depleted coverage sometime to between workers 1993nowandexempted 1995. from The fact participation. of the matterThese is that are: the(i) above instances, in shows thirty-four Social combination the _20,000 Security estimated anin in added with 1979. Reform 1978,dollar age average To whereas has atlimit death. of come disposal non-Social employee 31 the to percent Even complexity grips income contributions. though with Security of for the aof average future funda men the income mental did. analysis, life cohorts willSimilarly, expectancy problem result only of retirees one ininmembers the cohort from for should countervailing provided from the modifying adopt sake by Social of a CSRS goals Social discussion, Security. inofSecurity accordance adequacy would Apolicy twenty-one-year-old and begin withequity that this in January allows proposal through some 1984 its worker would margin and financing can grow would for acquire significantly index and error. benefit Social theIn is little double attribution of service both to a noncovered pension system and presented with a clean slate, it Fight design a program significantly different If current new federal deliberations wo UNDER rkers on SOCIAL areSocial covered SECURITY, Security underSELE financing. Social CTED YEARS Security I 1983-2050 appear and atoday supplemental in my The Universal Social Security Coverage Study, which was mandated by the $10,000 inadequate percent current favored CSRSincome is primarily theprotection recommendation; dependent for persons 55 on percent taxpayer not covered opposed support by it. Social on whatever On Security; increasing basis (2) the the oin of program. significant is urcreases minority shown. simulations (4) over IfThis reductions gro Congress Social ups the cohort underwould simulation Security three fails was in benefit disposable chosen to different COSTS period, addfrom ress because = benefits income. some Social the thisredistributive these people problem Security Such (SS) people still minus a support policy policy would die employee aspects would between for scenarios feelSocial ofappear thethe Social main Security xages imu to1982 m of after Security structure. essence,the disability this turUnntil means of the recently, that protection century any this policy aswith process the credited changes federal has Congress been work earnings force relatively makes forbecomes six inuncontroversial quarters thepredominantly currentof work benefit to Social formula Security."bend Dual points" beneficiary by 75 percent status ofoccu wage rs growth because instead recipientsof the havefull from the one now known as Social Security. But Congress does not have a clean contributions. pension capacity isas established Research CuDirector rrent the implications System of the Employee Modified for taxBenefit pSystem ayers will Research Netdepend Savings Institute. on several EBRI Congress as part of the 1977 Social Security Amendments, quantified the costs Current Policy Benefits self-employed payroll tax rate 40 percent favored while 51 percent opposed the inequities Year cost effect in covered ofoftheeach inherent employment; syste ofm the is in considered. options (billions) partial in fact,simulated. exemption these credits from (billions) participation can be earned(billions) in witha mandatory as little as have sixty-two dollars. Security. can only inherent erode and The Onlysixty-five top inequities. further 12.9 linepercent in as and the the It of sixty-five is figure short-term the our whites understanding represents and adjust employed sixty-eight. ments estimated that byarethe subcommittee implemented People average federal who disposable government staff do and not theis wage complied because covered environ indexation mentby virtually with 9,00/) the should mandatory new that .... all not syste is MoctiHcd beneficiaries promise mnow , provisions used u Benefit ltimately, more to Founder radjust have cash nm!a the both benefits received, the savings covered formula / for orwould and could the annually. .o" noncovered future grow expect to than Tnearly his to we receive, are slate; there is a defined structure with an inherent set of obligations. factors. is a nonprofit In order organization to show the dedicated budgetaryto providing impact of covering research and new analysis Federal workers which of these (5) unwarranted Total Budget bonusesCostfrom= old Social CSRS Security. cost plus The new CSRS estimatecost is that the increase. When asked about delaying the July 1983 cost of living allowance redist live 1983 ributive to age From sixty-five a program; lifetime-benefits orand $ who 17.9 (3)live superspective, bsidized only a few _benefits 17.7 years the distributional afforded into retirement _partial o.2 effects would of the had one aware family comingmonth annual ofHospital inco There this mof esalaries covered problem under areInsuthose rance current below employment andwho_i0,000 financing is Social argue devising inplus in that two Secu crisis April rSocial aity taxpayer consecutive legislative approaches. 1978, policy. Secusupport rbut ityyears. package T19.4 he cost. is middle percent To now 3 that / become required line includes of minority insured showsbecause athe procedure one-quarter benefits employment. that would ofWhile substantially the be continued working current in system's exceeded for noncovered sixteen projected the years employment value cost. under of their they the The contributions. II-B net contributed savings assuwptionsto estimates their Theused sure we can provide. This is especially the case given the pending financing Congress faces the choice between making a set of incremental adjustments or 8,000 _. •. •""" """" "- under 1984 Social Security and a20.0 modified pension 19.9 I have analyzed and0.iwill discuss a can serve as the basis for sound policy toward employee benefits. EBRI as an total bonuses exceed $2 billion per year. These are costs incurred by Social 7,000 1985 22.4 22.2 0.2 (CC_A) adjustment to Janaury 1984, on the other hand, 52 percent favored this participants receive benefitsin social for a shorter Security. period under this option. Obviously, their projected more under group various of past equitable employees CSRS, options imprudence: Before paththe making of provison. did. same areaverage quite massive person any In comparison, income decisions different. would liabilities under have about 11.6 The the to (i.e., work percent changes options Socialfive benefit to of that Security years minority Social adjust promises) for benefit Security federal the the federal were benefit formula that workers might in days of moving theare1982quickly toTrustees' the mpassing odified Report when system although all domembers nota shorter include of eachor anyretiring longer savingsperiod group that could of could workers be be usedcan pension problems plan of the and HI became program. eligibleThis for raises benefits. the possibility While working that in adjust covered ments made Fore radically restructuring the existing system. 1986 24.3 24.1 0.2 proposal institution thatdoescaptures not takethe positions essence of on apublic bill (S2905) policy issues. introducedPriorby to Senator joiningTed Equation (2) is essentially the same as equation (i) discussed earlier, Security and borne by the taxpayers who contribute to the program. While 6,000 1987 26.3 26 .I 0.2 modification lifeti policy govermenment. while Inadequate benefits that 43 perwould would cent Protection be slow opposed reduced bend-point forit.Persons significantly. On the growth NotCommission's Covered to 75 percent -- Most proposal ofworkers wages to tax not for Social a has help accu formula msalaries ulated to Finally, resolve (i.e., but exceeding bend never the the point long-term proposal funded. _20,000 adjustments) The to deficit persubject National year,ittend while contributions is Federation to important 37.5 cluster percent to of to theFederal consider cash benefit of white or Employees deferred the reductions, Federal under- depending realized expect to if on receive Social actual more Security economic than the windfall experience. value reduction of their The net co provisions mbined ultimate employer-employee for effect old of hires thiswere employment today may have they more contributed drastic to effects Social orSecurity provide and greater met program the eligibility savings than In our work at EBRI we have compared the implications of various 1988 Stevens (R. Alaska) during 28.4 1982. 28.1 0.3 EBRI, I served as the Deputy Director of the Office of Policy Analysis in the another which applied recommendation to the current by the system. Commission The would difference reduce is these that windfalls equation over (2) 5,000 1989 Security benefits 46 percent30.3favored while 4930.0 percent opposed it. 0.3 With the covered The by Social option Security that raises are normal covered retirement by pension age plansbut sponsored maintains bythetheir current workers defined lying arrangement relative argues implications that period. had to such current "the (CODA) salaries The unfunded pl ofpao bottom nslicy, alternative set in deficit below line April up under shows 15 policies. originated 1978. percent. S401(k) the projected There because ofUnder thearepath IRS the thetwocode price federal ifbasic the may indexing approaches for govern bemula incon- ment of were for benefit requirements payroll impl eme nttax Inequities for emd. ula contributions. for modification a Social Inherent Security The in under Exemptions future the benefit II-B balance from asassu well. mParticipation of ptions adequacy Manywould ofandthose in beequity atoMandatory who reduce has receive to be future generations would accept. For example, if it is socially desirable to long-run options using a computer model that simulates people's work careers t I ', I I I I 1990 Senator Stevens' bill 32.3 called for Social 31.7 Security coverage0.6 coordinated Social Security Administration. Prior to that I was Deputy Research Director applied only to those workers on the payroll or persons entitled to CSRS time, extending coverage to new federal workers would help to ameliorate the 1985 1990 1995 200t) 20t):, 2010 201_ 1991 34.2 33.7 0.5 early exception failed retirement to pay of the itsage latter share woulditem, intoleadthe where tofund somewhat thefrom responses 1920 largerto were benefit 1956." withinreductions It the is not 3 percent clear on what employers. mearnings sistent eliminating odified It with and options, isBoth the half other thelong-term Social redistributive benefit ofgeneral Social Security reductions deficit: and Security FICand aspect A raising tabenefits the for xingoftypical thepolicy. Social additional majority began pension Secu to Given rity would revenues be plan that treated that also require there oralso be as slowing less gives regular has a period than been the rise Redistributive considered raise theInlevel su inm,the Program mofodifyin framework realg--Social Career theofCSSecurity aRSnoncovered broader along benefits th seteworkers of linepriorities. sinofthe aretheexempted future Stevensitfrom pcan roposal paying be preferential average Social treatment Security from benefits Social by Security about ii because percent, ofwhen noncovered compared employment with the and retirement lives. 5/ In the analysis we compared the effects of five m Year with 1995 a modified federal pension 42.4 for new Federal 41.6 employees beginning 0.8 in 1983. of the Universal Social Security Coverage Study, a study mandated by Congress proble benefits m more (receiving quickly. or deferred) on the assu_ed date the modified system would 2000 54.5 54.7 -0.2 sampling error range of being evenly split. Each of the particular responses of to average in absolutely 15 the growth come. employment percent. the govern third in than m The ent's outlays. no diffe any Under set under analysis rof of en "share" ceeach the the problems ofother between retirement ofwas the these which du options. revenue ring the options prog many cthis urrent reffects ampeople This there period before poli occu of cbelieve is yrbut sthis the aand because clear employee worker proposal constitutes the modal combined people is contributions oreligible group its the are with potential most expected fornet would cu into rrentanresult policy Two income-redistributive equally inbenefit signific important alevels. nt budprogram policy get Yet, ary over goals that savings the provides forperiod, over Socialboth proportionately average Security the short benefits are and solvency more lon would g and receive accomplished absolutely throughno the retirement legislative benefits processfromatthe thatnoncovered time. The employer's public would options by calculating the present value of Social Security benefits based on Source: Sylvester d. Schieber, Social Security: in 1977. That 2005 is the implementation 70.8 year used for this68.1 analysis; using 1984 2.7 as the first be Implications put into operation. of Covering Equation Federal Workers (i), in contrast, assumed that future new Perspectives on Preserving the System was inconsistent with the overall assessment that taxes should be raised rather 2010 93.2 86 .i 7 .i pension insurance to narrowly alte iimportant of mplications rchoose refunds natives plan. Raising distributed protection. to inequity were retire may on the only additional be resulting at distribution considered benefit one-qu AS an age aarter revenues result, reductions from close as of ofthe an workers to ultimate one through 8cupercent the rrent billion being retire who the benefits pattern spread reduction ment have dollars payrollacross jobs age such of more tax Social innot under ainco a orpolicy than covered wide malternative ecu Secu rrent govern rat range ity mayby age ment policy, deserve Social of the continue generous public term. cov support. benefits to erage grow of steadily. If tonew these low-wage hires goals und than er areto Social nothigh-wage met, Secur adequacy ityworkers. would and mai Part equity ntainof considerations the the payroll level of then have a much clearer understanding of the needs of the elderly population the simulated life beyond age sixty-two, under each of the options. We @gashington, D.C. : EBRI, 1982) p. xxxi. 2015 122.4 102.9 19.5 year would I have not recently significantly written,change and the EBRIanalysis has published, or results. a bookTheentitled analysis Social here workers would continue to be covered under the current system. Equation (3) Several of the organizations that represent federal civilian and postal 2020 than benefits reduced. 4/ 161.9 130.8 31.0 Security appropriations or who and shiftcontributions between covered for the and period noncovered1920 employment to 1955. The may total experience at sixty-five exemption additional sources population. the expense would s •by scrutiny. Under the help of year the these resolve larger 2015. options, theactuarial Another projected almost way reductions everybody problem. of expressing inends To their raise the up benefits. indifference revenue roughly sources If the is older to same will tax employee contributions become This A contributions moremoot. option appropriate ofQuestions can high-wage for be perceived description retire about covered mentSocial aspwidely ur workers providing posSecurity's es. used isInused ainreal asolvency the bud togcut etary provide literatu inhave rbenefits sense e more shaken char- then, generous only theany and the relative burden that Social Security financing will place on workers. calculated the stream of annual benefits paid each year that a person lived Statement of 2025 breaks the ongoing costs 212.6 of the total system167.3 into two components: 45.3 (i) the Security: Perspectives on Preserving the System that focuses on the evolution represents the budgetary cost of the new federal retirement program. workers have begun a full-scale attack on the proposal to cover new Federal 2030 It is not clear what 277.7people perceive 211.8 when they are confronted 65.9 with C ONCL USI ON periods wo uboat, say now nrfunded kers that to sothe Benefits we without under to liabilities re extent speak. to current disability extend Afforded requi The of red thei policy, variations the rPartial and toCSRS caree balance average surrsvivor at Participants inthe inthe the real coverage. the enddistributions syste fut disposable ofmurin 1955 e, over Social however, were the income that Security less longthis exist than isterm projected pheno --$fro i0 could Workers mmenonthecause to benefits if pconfidence ropthe osalbenefits to couof pretirees ledoldfor with and potential with young Social lowalike. Sretirees average ecurity Without lifetime coverage decades confidence hence earnings that just under that than maintai theitthey ncurrent is s would solvent, or do policy es not acterizes the relatively generous payments to people with periods of noncovered beyond One has age to assu_e sixty-two;that this future calculation Congresses included will benot equipped only worker to assess benefits appropriate but 2035 360.0 273.6 86.4 of ongoing Social costs Security associated in thiswith country, Sylvester the closed its J.cusystem rrent Schieberfinancing that would problems, apply to and old the hires, Equation (4) shows the budgetary effects of Social Security coverage of workers under Social Security. In each instance, the presentation distorts the questions 2040 related to benefit 465.7reductions. Research Direc The 360.3 tor various long-term 105.4 options that billion. public By compension parison, plans of the usually roughly require $500 at billi least on in fiveunfunded years of benefit service with might otherwise alternative massive rise periods by be Our 1.9 trust less receive analysis times formula ofextensive fund noncovered between ifaccumulations adjustments Social suggests than1985 emSecurity ployment the that and stem simulation during 2015 thewere from ,who future the whereas qualify variations notsuggests. 1990s. tilted of it the formight Unless to in retirement The Social favor work size goprovisions and Security uplow-income ofonly income eathe rnings 1.8 baby-boom benefits are security times made are employment support increconsidered ase for totas athe l "windfall to fed program er bealfirmly rwill benefits." etirecommitted. ment wither.benef TheitsUniversal It is cannot tenuous Social cost tothe Security assu_e taxpayers that Coverage m the ore exact than benefit spouse and and sur taxing vivor provisions benefits asinwell. their Each respective benefit times. was attributed Policymakersto the then and 2045 (2) the costs of the new 604.1system covering 499.2 future employees. 104.9 The budgetary new prospects hires. forThethebudgetary future. effect The analysis is different looks at fromSocial the effect Securityof the in the OASDHI facts pertinent to the consideration of this proposal made by the National F1GtRE 2 would 2050 adjust the normal retire 786.7ment age in Social 683.6 Security or 103 gradually •1 reduce worke before patterns rs. thein The worker thehighly simulations. receives paid noncovered disability worker protection. does notManyshare employees this burin den.the There receive cohort Study syste promises under to handle m characterized the may and higher on modified those not the theprospects benefits beCSRS trust sopolicy. the dismal books Employee funds, windfalls inof proportion at the asraising the aBenefit mass narrow as end"unintended exodus taxes to ofResearch focus their fiscal might of oncontributions these Institute 1981, subsidies." Social createpeople nearly Security's even fro to one-quarter more Historical m Social the problems. current work Security (23.8 forceTo level the curre of Intergenerational nt SocialsysteSecurity m. benefits concerns toabout be paid Social ten, Security twenty, link or thirty the short- years and from will be better able to judge the relative needs and capabilities of their person to whom it would be paid; that is, a spouse benefit was attributed to Future Average Disposable Family Income at Age 65 costs frameworkof the of separate the larger syste retirement ms can then incomebe aggregated security system to getin the thiscombined country. accounts, in that the specific account would be credited for both employer and Commission on Social Security Reform. These presentations make three basic the rate of earnings replacement arebefore widely thecharacterized as benefit initial five years of service are young people holding their first major jobs mCis than merely percent) financing ight ongressional nothing doresult schedule wo The Under rarose kers prinherently oje combined in cconcern the tions during significant with futuscenario re only effects different about would 1980 tax covered for and increases wage unintended suggest. of 1981. raising in modifying growth employment. thesufficient The While subsidies employment both among growth theno thethe formula It one normal to dates in members is ofcan meet the noncovered important plus back retirement predict CSRS theoftreating to long-term this unfunded to 1939 the workers cohort understand and future when halfproble early liabiltiy that the as ofwith ms society long-ter_ and Theconsiderations, ethird conomy point than opponents anypolicy one mcakers anofjudge Social cannot today. Secur seek ity solvency coverage with of fetotal deral dis- now is broadly perceived as that firmly committed. The most important the spouse, not to the primary beneficiary on whose benefit the spouse was In 1982 Dollars While system's my c analysis ost. touches on many aspects of the issues surrounding Social points. employee SOURCE: contributions. Sylvester J. schieber, Since Social The Cost Security and Funding is in the Implications unified budget, of the in reductions. 1980 and 1981 This was interpretation more than 10 istimes only the partially total accu correct. mulation Whatof unfunded is not always differentiates who have no othertheir pension work protection. from that of noncovered Although disability workers. isThere unlikely are for most they benefits great retirement would begin accu be ras Modifying to acy, to ages, reguar levy retire. soabout on meincome the today's trends To 34 Civil would percent some Social can children Service extent, close beSecu ofobserved rity Retire the and atthispeople least those ment Subcommittee phenomenon and 90 not had their System, percent yet benefit outc is born (Washington, omes captured of reductions athe burden predicted. projected in that D.C. theof :less For House commit that wregard orker ment salthough offor aRepresentatives' rgushould either e this is th be adequacy at difference tosuch assure Report aorpoequity. islicy that on quantifiable, the the would There Social benefits ultiis mately Security the general willissue raise be Act agreement there is Soci Amend still awhen l mentshighly Sacross ecurity people of the 1939 need based. Annual benefits were calculated in 1982 dollars and discounted by a 2 CtlITCI31 Polio 5 $22 .000 Security The today, total I budgetary will focus impact primarily of modifying on two issues: CSRS is different first, the from expansion the of employer First, contribution EBRI, they Augustallege would 19, 1982). that show Ways without up and Tables asMeans an new2,6,and expense committee contributions 8.in the agencies' the Civil budgets Service and • ...... Modilicd Benefit FOl ilmla understood is that there is inherent growth built into the Social Security young stated: workers, it does occur and the worker is often without insurance or simulation, ac liability than long-term current countants, 5 percent. or over deficit prior but lawyers the possibly In generations in ,first fact the United economists not Social 35 someye States sufficiently. have a,preo sSecurity pleactu of been House with ar the ies unwilling program's ,cash oflong If Representatives blue-collar benefit the lives towages existence. bear. beyond programs. workers of Will this age,Itsixty-eight future cohort This cis lerks, clear were ,and that to emotional entire costs. example, political ThAe mand erican re controversial. has spectru society never m beethat is n aging aLanguage retirees set and of cost must itmust will esti benot mselected continue ates be ravaged by to carefully any doby of so. program the sor Inesthat paddition, onsibl the e them and that those benefits will provide a reasonable base of support for the percent real rate of return back to age sixty-two to give the value of lifetime ...... M,.,diri_.d Formula and Tax 5(}(2 _ .... -2-" £ coverage effect on totheinclude various newaccounts federal taken workers separately. in the future, Both CSRS and second, and Social Social as budgetary equal trust cost fund of theinco cumrerentin the system Social and security the proposed accounts. modified Thesystem two would and the Retirement System (CSRS) would go bankrupt and taxpayers would have to shoulder 20.000 {}t Benefits .._....-"°2-22"''" assets. benefit structure that will increase the purchasing power of average benefits February 8, 198 3 secretaries issues who rise particula the taxpayers worked current appreciably rare be not to set in CSRS willing normal both of obscured as is options the the largely retirement to covered by group accept has rhetoric. dependent been approached that and age chosen the under buron den? noncovered retire taxpayer not bothmMaybe ent, tosimulations, represent support sectors. they the will; labor-force toawould The meet preferred possibly only receive current policy they elderly's pensions mparti odifications. es involv and retirement eprivate d Atthathe t income retirement shows same security. the time,savings netthecost national are of growing Socicommit al Sme in ent curity importance torising the in ascaome s sources a resultof benefits that would be paid to all persons who reached early retirement age -- 1985 A,cra_u Famil3 IIIt-("II/_"°"_'2"--''-N-- cancel each other out. Security are now within the unified budget. Segregating the old and new Security's net differences. long-run Based financing on the situation. projections, moving to the modified system on the burden. An average The inference wage formula is that will employee also havecontributions the effect assure the solvency won't. in the future. Workers who For example, leave federal figure employment 1 shows the without growth CSRSin annuity average status, benefits for COMPARING participation distinction benefits higher retirement option, lifetime Frequently, but pay THEincome mis rather ents; ALTERNATIVES ofthat benefits the security to itsome people elde put continues rly workers under the who andcould discussion have they the toarebe higher-retirement-ages accu will aemployed expected favorable mulate in continue a by proper added toratio employers rise to liabilities context. doofand so benefits scenario. who the in ado Each Social favorable for to notof future con- This Security the security of coveringof the federelderly al workerust rs. beWishing perceived that asthea burden numbers equitably showed such shared a cost by all of raising the level of benefits payable in the under current policy for each of the policy options that was simulated. The systems, SOCIAL SECURITY the costs COVERAGE for theFORvarious F_gERAL accounts WORKERS can be considered as follows: January The i, 1983, total would budgetary reducecosts, the budgetary modifying costs CSRS as of considered federal retirement here, canbybe$i of the CSRS early-- years dry them of the up and system, benefits but itcannot will reduce be paid. The fact is that if participate occurs under The vlews the because cu inin rrent this the their policy statement system. benefits simulation arewould thosebe in ofcalculated 1982 the dollars author on as and thethe dobasis not solidof necessarily upper a PIA line. formula benefit other example, generations options reductions Some are of the analysts considered taxpayers least wouldwill likely would be aspoint less well. tohave pronounced have to distributional several Social than public Security theresults opinion sicoverage mulation somewhat pollsand results that are different have the shownmost been tributions policy increas elementse environment. Setting or offrom msociety. erely any Social saying retire Although Security mentit, does the age because aging in not a mak national of ofe periods society it so. program of isInnoncovered bound fact, the tomagnitude theputemployment esti extra mates of stress by are future costs by eliminating unwarranted bonuses value of benefits under each of the alternative policy options was then 14,000 . • "...- calculated billion reflect The over theaccording proposal views the fi ofrstto the by five equation the Employee National years.(5) Benefit While and Commission compared the Research cost onwith Social savings Institute, the Secu cost dur rity ing itsof the Trustees, the Reform eacu rly rrent to employee payable contributions under the werepresent the only formula source to ofworkers income into CSRS the fund would be 2The membe / rbroken See s, Sylvester or lower other line J. staff. Schieber, in the figure The Cost shows andfuture Fundingaverage Implications Social Security of Modifying in from taken likely table those intoThe 2recent need suggest. associated second it. yearspoint Of with indicating workers that this opponents who particular a left greaterfederal of option, public expanded employment willingness but Social most between Security would to accept not 1973 coverage be and higher Social characterized the on whose Social Social bend Security It insured TheSecu should points Sec most rity, ur asity employment is"double prevalent be had somewhat the actuari kept been growth dippers." ein s only perception indexed armind, bitrary. hav of aefew pensions however, three consist Theyears. ofThe attribution eyoung additional ntly can establish that These p help ashown rticipants some ment bonuses is years. tononcovered significant misleading relieve of About in agesome Social sixty-five employees and 23 short- ofpercent brings Security athat nd are inaof compared with the value under the current policy option, and the percentage 12.(100 the civil Service Retirement System (Washington, D.C.: EBRI, 1982) for a syste years coverm would federal derivedbe workers moderate on the will basis in relative likely of equation create terms,(i). moretheTable controversy actual1 numbers showsthan thethat any projected other would show depleted by 1987 or 1988 at the latest. Even if the system operated in are justified, if a total wage formula is used, in 18.{}{}o, 6ooo ""'.........".-" . .•""'."""2; ""'" burden. complete benefit levels discussion under ofan the option derivation that would of these slow the estimgrowth ates. of initial benefit significantly 1977, argue Social an isSecurity Itaverage that is covering als different otaxes of imp 39ortant rather percent new in the federal to than of aggregate. remem the benefit workers ber men tha and reductions. twill63 there mean percent are higher It other ofisthe future not sources women clear budgetary were ofwhat incnot ome low-paid perjorative today the people is workers that at tonethe theywho toupper will the would discussion. never end actually ofget the benefits dist benefit Both ributthe iofrom nfrom description wthe oexpanded uldprogram. experience coverage. and the Virtually benefi policy Women, t all for of 1935 long-ter asm the Social savi case ngs Security's I offor older oth I erand retire payroll low-paid mIent tax age _pa workers yers was basically I iwho f fed retire eral 1 a normative worke l rs aredecision. covered up element in thein unified the 1985 package. budget 1990 might It is1995 the be affected only 2000 recommendation by 2005moving 2t}10 accounts in the 201 _package in or outbeing of the in the early years of the system and have not had 5/ For a complete description of this analysis see Sylvester J. Schieber, OTHER CONSIDERATIONS that solutions costs insured these will for polls against Ifhelp that federal Social areto have telling disability. mitigate Security retirement. been us, putthe ishowever. forward to effects Therembudgetary aintoIn ofsolve the amodifications recent cornerstone cost the "double of Washington the in ofCSRS dipper" Social ourPost can retire problem Security. be-ment ABC News By example, reductions 3und / erSeeSoci time Sylvester would alofin Se25 benefit curity. which percent J. Schieber, tofrom build or wider moreThe up under substantial Social Cost 5"earthis and Security Funding option, benefitcoverage. Implications while i0 Approximately percent of Modifying would 28 lose The ithe / same House long-term can of be Representatives, savings said about in thetheCommission's 76th other Congress, facets reco ofFirst mmendations the Session, program are asReport well, by-products no. from728, theof Social Security: Perspectives on Preserving the System (Washington, D.C. : 4/ Barry Sussman, "Social Security Plan Splits Public Opinion." The budget. the Civil This Service wouldRetirement not affectSyste taxpayer m (Washington, costs for D.C.: federalEBRI, retirement. 1982) for the Social Security rights. Act In the Amendments long run,of however, 1939 (Junesuchi, bonuses 1939), p.are10. Employee Benefit Research Institute, 1982). Washington Post (January 27, 1983) p. A4. detailed reflect poll 58 aWorkers percent projections lack ofin preferred understanding employment of theraising component notof covered taxes the ele problem to ments by21Social percent of or of each Secu potential selecting rof itythese also effective equations. benefit experiencecuts as percent the benefits systemtime , of There italtogether. anywomen mustofareadjust the employed certain long-term The in by wider facets the the options future distribution federal of the tobeing meet package government seriously of the benefit submitted changing in discussed April reductions needs by 1978 the is ofNational had fully from society. annual raising benefit unwise structure and to endanger the financing the solvency provisions. of the The systemprospect by facing Congress SOURCE" Sylvester J. Schieber, Social Security" Perspectives on Preserving the System solutions. @qashington, D.C." EBRI, 1982) p. xxxii.